The court reversed the decision to impose administrative sanctions against OOO Rich-Oil under Part 15 of Article 19.5 of the Code of Administrative Offences of the Russian Federation (“non-performance of an order of the federal executive governmental body empowered to exercise state control (supervision) over the observance of the provisions of technical regulations”).
The Siberian Office of Rosstandart (the Federal Agency on Technical Regulation and Metrology) petitioned the Arbitration Court of Altai Krai to impose administrative action against OOO Rich-Oil for their failure to execute an order to eliminate violations of Regulations in due time, law infringement under Part 15 of Article 19.5 being punishable by fine from RUB 300,000 to 500,000.
The trial court had already upheld the claim, with us being able to decrease the fine to RUB 150,000 –success in a way. Still, we decided to continue as we disagreed with the Court's ruling ad rem.
The Seventh Arbitration Court of Appeals decided in favour of the client and upheld the appeal in full. We managed to prove three arguments in the course of appellate proceedings:
1. The Order of the Siberian Office of Rosstandart was illegal since it failed to meet the criteria of enforceability and contained no record of actions necessary to execute the Order in due time.
2. The guilty verdict was based on insufficient evidence: sampling protocol and fuel testing protocols did not correspond to GOST Russian National Standard designed and approved by Rosstandart themselves.
3. To justify the appeal, we proved that a failure to execute an Order issued by a regional office of Rosstandart should not be considered as a violation of Part 15 of Article 19.5 of the Russian Code of Administrative Offences: under this article, the legal entity is held responsible for “non-performance of an order of the federal executive governmental body” rather than its regional office. If the court finds grounds for imposition of administrative sanctions, the general provision should be used instead, i.e. Part 1 of Article 19.5 of the Code, with a fine amounting to RUB 10,000–20,000.
This court’s ruling is of great importance since it both prevented imposing administrative sanctions with disregard for the rule of law and established a precedent for such cases.