COBALT represents Rīgas siltums in a settlement with Latvian competition authority

Rīgas siltums, the municipal district heating utility, and the Latvian competition authority have settled a dispute that concerned the treatment of debts accrued by deceased and insolvent users.

In late 2013, the Parliament adopted rules requiring the utility (i.e., the provider of heat energy, gas, water, wastewater removal and waste management services) to write off such debts. Previously, in accordance with general contract law, the debts were recoverable from the contractual partner of the provider, namely from the building manager or the community of the owners of the building.

The competition authority took the view that refusal to write off the debts that had arisen prior to the new rules could be regarded as abuse of dominant position. It asserted that the write–off obligation already existed before Parliament’s intervention, and the new rules were merely a “codification”.

The parties agreed to settle their differences. The competition authority abstained from making a finding of abuse of dominant position, and Rīgas siltums agreed to write off the disputed debts, thus essentially socialising them among all its clients rather than the clients of the building manager or the owners of the respective building.

COBALT’s partner Uģis Zeltiņš and lawyer Kristīne Gailīte acted for Rīgas siltums at the competition authority.