Press centre News

On September 30, the VEGAS LEX law firm won a dispute for the sake of the Second Generating Company of the Wholesale Power Market (OGK-2)* in a dispute over the quality of a gas turbine engine (GTD-110) supplied by NPO Saturn to compel the defendant to restore the equipment’s operation after a breakdown.

NPO Saturn, a major Russian gas turbine manufacturer, supplied a GTD-110 engine as part of gas turbine equipment for OGK-2’s Ryazanskaya thermal power plant. However, the engine failed to meet the quality requirements stipulated by the supply contract, which led to several engine shutdowns during its service, and finally to a serious breakdown. The situation gave VEGAS LEX’s client the grounds to file free repair of the substandard equipment.

The Commercial Court of the Stavropol Territory considered the case for more than two years. The court ordered an expert evaluation of the equipment, which revealed improper quality of the materials used for the engine’s components as well as flaws in the equipment’s assembly.

Based on the evaluation results, VEGAS LEX proved that the defendant had supplied to its client a low quality product, and consequently, NPO Saturn’s claim of an overdue payment under the purchase agreement was invalid.

The court eventually ruled in favor of VEGAS LEX’s client and declined NPO Saturn’s RUR10mln claim. At the same time, the court supported OGK-2’s counter-claim to improve the low-quality equipment supplied and compelled the supplier to repair the engine within seven months free of charge.

The ruling in favor of OGK-2 was facilitated by the VL team led by Managing Partner Alexander Sitnikov and head of the Dispute Resolution Practice Kirill Trukhanov.

***

*The Second Generating Company of the Wholesale Power Market (OGK-2) is a Russian power generation company established during the reorganization of the RAO UES energy giant. It is part of Gazprom Energoholding. The company runs ten major federal-level thermal power plants includingPskovskaya, Serovskaya, Stavropolskaya, Troitskaya, Ryazanskaya, Novocherkasskaya, Kirishskaya, Cherepovetskaya, Krasnoyarskaya GRES-2 and Surgutskaya GRES-1.

For more information on VEGAS LEX’s dispute resolution services please click here.