IDGC of Centre challenges the decision of the Arbitration Court of Moscow to recover 5.1 billion rubles from the company at the suit of NLMK

20 November 2012

IDGC of Centre appealed to the Ninth Arbitration Court of Appeal regarding the decision of the Arbitration Court of Moscow to recover 5.1 billion rubles of unjust enrichment from Interregional Distribution Grid Company of Centre, Joint-Stock Company (hereinafter — the Company) in favour of OJSC “Novolipetsk Metallurgical Combine” (hereinafter — NLMK).

The Company considers the specified judicial act illegal, unreasonable, which violates the uniformity in the interpretation and application of the law by arbitration courts, and intends to seek its reversal in the court of appeal.

The Company is sure the legality of the reasons stated in the appeal, and believes that the payments, which are being recovered by NLMK, were made in accordance with the price list for the current service contract for the transmission of electricity, which has not been disputed by the parties, which eliminates the possibility of unjust enrichment on the part of the Company.

Since 2005 there is an agreement between IDGC of Centre and NLMK in action for provision of electricity transmission services, in accordance with which the Company provides NLMK with electricity transmission services, and NLMK pays for them in accordance with the terms and conditions of the agreement. In the process of providing electricity transmission services IDGC of Centre has used electric grid facilities located in the substations “Metallurgical”, “North” and “New”, which were owned by the Company on the basis of a lease agreement with FGC UES. Thus, IDGC of Centre provides services for the transmission of electricity to consumers of the Lipetsk region using electric grid facilities owned legally.

With the conclusion of the electricity transmission services agreement with NLMK in 2005 and to date the Company has been duly fulfilling the obligations under the agreement, as evidenced by the absence of NLMK’s claims about the quality of services provided, reliability of power supply, as well as the signed by both parties certificates of electricity transmission services provided.

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Сообщение о хищении электроэнергии