LEAUA DAMCALI DEACONU PAUNESCU – LDDP in consortium with LENZ & STAEHELIN (Geneva) successfully fend off the claims brought by the Swiss electricity trader ENERGY FINANCING TEAM AG against HIDROELECTRICA, the largest Romanian energy company, in an UNCITRAL Ad Hoc international arbitration
The Arbitral Tribunal constituted under the 1976 UNCITRAL Arbitration Rules rendered its Final Award on 24 December 2018, dismissing the claims brought by Energy Financing Team AG („EFT”) against HIDROELECTRICA SA, the largest Romanian energy company, in their entirety.
The Final Award of 24 December 2018 marks the end of the international arbitration proceedings initiated in 2014 by the Swiss electricity trader EFT. With its request for arbitration, EFT claimed approximately EUR 80 million in damages as a result of the alleged non-performance by HIDROELECTRICA of the long term Energy Supply Contract concluded by the parties in 2004 and rejected by HIDROELECTRICA’s Judicial Administrator in 2012, in the context of the Romanian company’s judicial reorganization.
Thanks to the robust defence provided by HIDROELECTRICA’s counsel, EFT reduced its claim during the proceedings to EUR 42’6 million plus 5% interest per annum as of 2013.
After having declared that the Judicial Administrator lawfully rejected the Energy Supply Contract in the Partial Award of 21 December 2017, the Arbitral Tribunal was once again persuaded by the arguments brought in defence of HIDROELECTRICA in respect of the law applicable to determine EFT’s entitlement to damages following the rejection of the Contract, if any, and the standard for the assessment of such damages.
The Arbitral Tribunal thus decided that the law applicable to EFT’s potential entitlement to damages was the Romanian law governing HIDROELECTRICA’s insolvency proceedings (i.e., Law 85/2006), as opposed to the Swiss law governing the parties’ Contract, as EFT argued. Justly applying the relevant provisions under Law 85/2006, the Tribunal found that EFT was not entitled to the damages it sought and fully dismissed its claim.
The successful defence of HIDROELECTRICA in this international arbitration is the result of the excellent collaboration between counsel from LEAUA DAMCALI DEACONU PAUNESCU – LDDP (the team including Dr. Crenguta Leaua, Andreea N. Simulescu and Andra Soare-Filatov) and Lenz & Staehelin – Geneva (the team including Dr. Xavier Favre-Bulle, David Dubin and Hanno Wehland) .
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