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The Federal Arbitration Court of the Moscow District reversed the decision of the Moscow Arbitration Court and the ruling of the 9th Arbitration Appeal Court on the claim of Novolipetsk Steel Plant against IDGC of Centre

27 June 2013

Today the Federal Arbitration Court of the Moscow District reversed the decision of the Moscow Arbitration Court and the ruling of the 9th Arbitration Appeal Court to recover 5.1 billion rubles of unjust enrichment from IDGC of Centre in favour of Novolipetsk Steel Plant (NLMK). According to the operative part of the judgment reversing a previous decision, announced June 27, 2013, IDGC of Centre received funds for the actual electricity transmission services rendered for NLMK in accordance with the terms of a contract on electric power transmission and applicable law.

The Court confirmed the invalidity of claims of NLMK, as all payments by NLMK were made pursuant to the current, not disputed contract for the provision of services. Therefore, the funds, received by the grid company, are not unjust enrichment.

Since 2005 between IDGC of Centre and NLMK there has been an electricity transmission services agreement in place, according to which the grid company provides electricity transmission services to the Steel Plant. In turn, NLMK is obliged to pay for these services in accordance with the terms of the concluded contract.

IDGC of Centre provides electricity transmission services for consumers in the Lipetsk region, including NLMK, using electric grid facilities owned legally.

The ruling of the Arbitration Appeal Court is the first judicial decision after the decision of the Presidium of the Supreme Arbitration Court of the Russian Federation in March 2013 in favour of the grid company. The Supreme Arbitration Court of the Russian Federation, having considered the same dispute between Chelyabinsk Electric Metallurgical Plant (CHEMK) and IDGC of Urals, confirmed the legitimacy of the actions of the grid company, pointing out that under these circumstances, the contested legal acts shall be repealed as violating the uniformity in the interpretation and application of laws by arbitration courts.

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