UKRAINIAN TRANSIT SURCHARGE ILLEGAL TOGLIATTIAZOT PROVES IN COURT

On November 15, 2016, the Higher Administrative Court of Ukraine considered a cassation appeal from JSC Togliattiazot (ToAZ), the largest ammonia manufacturer in Russia, against the ruling of the courts of first and second instance concerning a dispute with the Ministry of Economic Development and Trade of Ukraine.

Following the hearings, the Higher Administrative Court of Ukraine satisfied the cassation appeal of JSC Togliattiazot by recalling the ruling of the court of first instance and the court of appeals and annulling the order No. 1003 “On Surcharge to Tariffs on Ammonia Transit by Pipeline Transport via the Territory of Ukraine” issued by the Ministry of Economic Development and Trade of Ukraine on August 18, 2015. The ruling has already come into force.

Therefore, the surcharge for ammonia transit via the territory of Ukraine (more than USD8 per tonne of ammonia), which was effective in relation to Togliattiazot products for more than a year, is now cancelled.

Commenting on the ruling of the court, Vyacheslav Suslov, CEO of CJSC Corporation Togliattiazot, said: “Lower tariffs make ToAZ products more competitive considering the current price level. Moreover, the judgment of the Higher Administrative Court of Ukraine will allow us to demand that Ukraine compensate for losses incurred by Togliattiazot while this order was effective.”