OREANDA-NEWS. April 22, 2010. The Federal Antimonopoly Service (FAS Russia) found that the Federal Railway Transport Agency violated Part 1 Article 15 of the Federal Law "On Protection of Competition" by exercising actions that have resulted or can result in preventing, restricting or eliminating competition. FAS Russia also found that the "Railway Transport Security Service of the Russian Federation" Federal Unitary Enterprise violated Part 1 Article 10 of the Federal Law "On Protection of Competition". It imposed unfavourable contract conditions upon a counteragent, reported the press-centre of FAS Russia.

FAS Russia was approached by "Uralelektromed" OJSC.

Investigating the case, FAS Russia discovered:

An Appendix the No.38 Order of the Russian Ministry of Railways of 18th June 2003 "On approving the Rules for railway transportation of goods with escorting and protection consignors, consignees and the list of goods that require mandatory escorting and protection" approved the list of the goods that require mandatory shift escort and protection en route.

Under No.38 Order of the Ministry of Railways, shift escort of goods is exercised by shifting attendants en route of the goods. Such escort of goods is provided by the railway transport security services.

The "Railway Transport Security Service of the Russian Federation" Federal Unitary Enterprise has over 50% share on the market of services for shift escort and protection of the railway goods en route.

FAS Russia identified contracts conditions for providing en route escort and protection services for railway cars, and cargo containers transported by railway transport, that the "Railway Transport Security Service" imposed upon its counteragents:

- protection of the railway cars and containers with goods en route within the Russian Federation (under No.38 Order of the Ministry of Railways, protecting the goods is the main responsibility of the "Railway Transport Security Service");

- the cost of services for escorting and protection of railway cars and containers with the goods en route in the Russian Federation, is calculated in accordance with the rates of charges for shift escorting and protection of railway cars and containers with the goods (the "Railway Transport Security Service" unilaterally changes the rates of charges for shift escorting and protection of the goods, which results in unjustified increase of the price for the services);

- additional protection of railway cars and containers with the goods delayed en route or at the departure station, destination station, entry (exit) border, transfer and port railway stations is charged at the rates factored in the deflator index, which is fixed by the "Railway Transport Security Service" and is valid on the date when the goods were presented for shipping, for each car or container regardless of how many were transported (which considerably increases the cost of services);

- in case of short delivery, loss or damage of the goods en route through the fault of the "Railway Transport Security Service" , the company is liable for the cost of the goods but no more than the liability cap of the "Railway Transport Security Service" (it inflicts losses upon to consignors/ consignees or insurers in the difference between the real losses and the compensation received from the "Railway Transport Security Service" under the liability cap);
- early contract termination by the parties is possible upon a 3-month written notice to the other party (the "Railway Transport Security Service" can unilaterally terminate contracts, which can constitute abuse of market dominance).

FAS Russia also found that the Order of the "Railway Transport Security Service" established the company's cap on liability to its counteragents in case of short delivery, loss or damage of the goods en route, based on the "Procedures for calculating the cap on liability of the "Railway Transport Security Service of the Russian Federation" Federal Unitary Enterprise".

The Order of the "Railway Transport Security Service" set the cap on liability of the "Railway Transport Security Service" to its counteragents in case of short delivery, loss or damage of the goods en route through the fault of the "Railway Transport Security Service" for 2010 at the level of 2,200,000 per a railway car, or cargo container, which inflicts losses to consignors/ consignees or insurers in the difference between the real losses and compensation received from the "Railway Transport Security Service" under the liability cap (in 2008 the Arbitration Court of the Sverdlovsk region obligated the "Railway Transport Security Service" to compensate the full cost of the lost goods (11 million Rubles) to "Uralelektromed" OJSC.