Court decisions prevent power cuts to industries.

Industries have been obtaining court rulings to prevent interruptions in the supply of electricity and other essential services, such as water, gas, and internet. Their claim is that they are experiencing financial difficulties due to the crisis generated by the COVID-19 pandemic.

One of the injunctions benefits a sanitary metal industry in Mogi Mirim (SP), which cannot have its electricity cut off by the region's concessionaire, Elektro, for a period of 90 days. The period should be counted from the publication, on March 24, of Resolution No. 878, of the National Electric Energy Agency (Aneel).

The decision comes from the Court of Justice of São Paulo (TJ-SP). The request is based on the regulation of Aneel (Brazilian Electricity Regulatory Agency), which did not include the industry sector. It only determines the impossibility of interrupting the electricity distribution service, basically for residences and rural properties.

In the request, the lawyer advising the industry, Artur Ratc, partner at the law firm Ratc & Gueogjian Advogados, argued that the principle of equity should be respected, since other companies are also facing financial difficulties. In this case, the industry pays a monthly energy bill of approximately R$ 200,000. "This amount helps pay the company's payroll, which chose to prioritize paying its employees," he says. According to the lawyer, the Mogi Mirim unit employs about 200 workers.

In addition to the Aneel resolution, Ratc also argued that assistance to the destitute is a social right, based on Article 6 of the Constitution. "In this emergency situation, everyone suffering the economic consequences of the pandemic can be considered destitute," he states. He adds that suspending power and halting operations could further aggravate the company's financial crisis.

Ratc also requested the postponement of payments and the deferral of the ICMS (Value Added Tax) included in the invoices. In the first instance, all requests were denied. The injunction was granted in an interlocutory appeal (no. 2069088-96.2020.8.26.0000), analyzed by Judge Gil Coelho, of the 11th Chamber of Private Law of the TJ-SP (Court of Justice of São Paulo).

According to the lawyer, the decision creates an objective bias towards the principle of preserving the company. "It's a way to maintain a minimum cash flow so the company can pay salaries and plan for the next 90 days," he says.

In a statement, Elektro reports that it has not been notified of the preliminary injunction, "further clarifying that, as a regulated company, it complies with the decisions of the National Electric Energy Agency."

Companies undergoing judicial reorganization have also obtained court orders to maintain essential services. Fundição Balancins, a manufacturer of automotive parts, obtained a court order in its reorganization process that suspends the disconnection of electricity, water, gas, and internet services due to COVID-19.

The judge of the Single Court of the District of Embu-Guaçu (SP), Will Lucarelli, understood that, given the exceptional situation of the coronavirus, it would be appropriate to grant the request to suspend the interruption of these services until June 1st, under penalty of a daily fine of R$ 20,000 (case no. 1000809-97.2018.8.26.0177).

The company decided to file the request after being notified by the electricity concessionaire that the power would be cut off on the 24th. According to lawyer Daniel Machado Amaral, from Dasa Advogados, who advises the company, the interruption would paralyze business activities and jeopardize its recovery plan, frustrating dozens of creditors and jobs.

Source: Economic Value