The Civil Court today rejected a request by Easygas for the suspension of a legal notice which said that gas cylinders should be returned to the companies which first put them on the market. The case is continuing.
Easygas has filed a constitutional case accusing the government of abusing its power when it published the legal notice, which was meant to settle a long-standing dispute with competitor Liquigas.
The first hearing was held with urgency today.
Easygas, which entered the market after Liquigas took over part of Enemalta's operations, says the government should have never sold the old yellow cylinders as part of the privatisation agreement.
"The government, in its role as a businessman, is in trouble over the cylinders it sold to Liquigas because there is a court case going on that might declare it should never have sold those cylinders," Easygas' lawyer Georg Sapiano said, after filing the constitutional case on Monday.
"So, to solve the problem, it transforms itself into legislator, by passing a law without going to Parliament, then into adjudicator, by effectively deciding for the courts on this issue, and, finally, into regulator, by imposing rules in a marketplace where it had just acted commercially."
The legal notice, number 465, published at the end of November, lays down that gas cylinders belong to the company that originally put them on the market, effectively vindicating Liquigas after Easygas hoarded thousands of cylinders by offering €25 to customers who made the switch from the competitor.
By forcing the company to give back cylinders it had "bought" from customers, Easygas says, the government is breaching the Constitution.
Article 37 of the Constitution lays down that to forcibly deprive someone of their property there must be adequate compensation, the right for the person to defend themselves in an independent and impartial tribunal and the right to appeal a decision.
The European Convention of Human Rights also insists that such a move should be in the public interest.
In its court application, Easygas argues that these four elements were not catered for in the legal notice, so it is calling on the court to suspend the application of the provisions and declare the legal notice null and void.
MRA REACTION
In a reaction presented to the court today, the Malta Resources Authority said that Easygas could never become the owner of gas cylinders belonging to another company (Liquigas) without the latter's consent.
It said that when consumers bought gas cyclinders, they were buying the contents, but the actual cyclinders continued to belong to the companies which issued them. So much so that the companies were licensed to sell gas, not the cyclinders.
If Easygas had opted to collect the other company's cylinders from consumers and distributors - allegedly for €25 each - it did so at a risk to its business, and the fact that the use of the cylinders was being regulated in the interests of consumers and public safety, did not give it a right to compensation.
Furthermore, Easygas still had to show how many Liquigas cylinders it had in its possession, from where it had bought them, and for how much.
The MRA therefore objected to the request by Easygas for the suspension of the legal notice.
Gas watchdog warns operators to follow legal notice
Earlier, the Malta Resources Authority warned gas operators to abide by the legal notice, an appeal that was backed and accepted by Liquigas.
The regulator said it held “lengthy discussions” last week with both operators, and with the distributors, to ensure everyone fulfilled their obligations.
The legal notice says the companies must return cylinders to their rightful owner within seven days.
So far, after two weeks, neither company has informed the authority of having picked up a competitor’s cylinder from a customer but the MRA said it issued a formal warning to the providers to abide by the legal notice.
It pointed out that the law was not retroactive and applied from November 29, meaning the thousands of cylinders collected by Easygas until that date do not have to be returned.
Liquigas has called for effective enforcement of the legal notice published two weeks ago, saying there is an urgent need to curb “illegal and abusive practices” in the local gas sector.
It stressed that, throughout the issue, it had always been on the right side of the law.
“In effect, the legal notice backs Liquigas’ argument that ex-Enemalta cylinders became its property the moment it took over Enemalta’s gas supply operation. On our part, Liquigas has every intention to adhere with this legal notice.”
Liquigas accused Easygas of continuously playing with figures while hoarding thousands of cylinders and taking them out of the country.
“It is the MRA’s responsibility to ensure that this legal notice is truly and effectively enforced. No more unruliness and further defiance of the regulations, or monopolistic practices should be allowed in this important sector.”
Despite the legal notice not being retroactive, Liquigas said it confirmed that Easygas abused Liquigas’ property when it sent cylinders to Italy to be repainted in Easygas colours.
Meanwhile, a batch of 1,500 Liquigas cylinders that were found in an Italian gas plant during a raid in October have been released by the police after the courts established they belonged to Liquigas. They are now on their way to be shipped back to Malta.
Liquigas had accused Easygas of repainting the cylinders, grinding off their serial numbers and bringing them back to Malta to be sold here as Easygas cylinders.
Easygas admitted to sending them to Italy for eventual repainting but said this would only be done once a pending court case determined who owned the cylinders. Easygas denied grinding off serial numbers.
Easygas has filed a constitutional challenge to the law. But the MRA said that, during meetings, Easygas committed itself to comply with the legal notice.