The Belgrade-based Arbitral Tribunal, which issued a second partial decision in the Ugljevik case in July this year on the payment of EUR 67 million of compensation for non-delivered electricity from the Ugljevik thermal power plant and an unquantified amount of default interest from 1 January 2022 onwards, issued its final arbitral decision on 19 October 2023. It decided on the due interest and the costs of the proceedings, ordering the defendant to pay a further EUR 58.2 million in interest accrued in the period up to 31 December 2021. Elektrogospodarstvo Slovenije – razvoj in inžiring (EGS-RI), the holder of the claims in question, was successfully represented by Holding Slovenske elektrarne (HSE) throughout the arbitration proceedings.

Let us recall: EGS-RI participated in the construction of the Ugljevik Mine and Thermal Power Plant (RiTE Ugljevik) in the period 1981–1991. The arbitration proceedings against RiTE Ugljevik date back to June 2014. At that time, HSE filed a request for ad hoc arbitration with the seat in Belgrade against RiTE Ugljevik on behalf of the EGS-RI. The dispute between EGS-RI relates to investments in the construction of the mine and thermal power plant and a total of more than 5 TWh of undelivered electricity owed. HSE conducted the arbitration proceedings against RiTE Ugljevik on behalf of EGS-RI, in accordance with the Government’s decision.

“A part of the dispute that has burdened relations with the energy sector of the Republic of Serbia for more than 30 years is reaching its epilogue. HSE considers the two arbitral decisions to be a remarkable achievement in major international arbitration disputes,” says Dr Tomaž Štokelj, Chief Executive Officer of HSE.

Uroš Podobnik, Business Director of HSE, who coordinated with the HSE legal team all the activities of the arbitration proceedings on the HSE side, adds: “This success is the result of more than ten years of hard professional work and proves that with a top team of lawyers we are able to cope with even the most demanding international legal proceedings.”

The total amount, i.e. including all accrued interest to date, of over EUR 130 million, was awarded in favour of EGS-RI which is wholly owned by the Republic of Slovenia, with the HSE entitled to reimbursement of its costs and a success fee for the arbitration proceedings. Despite the final arbitral decision before the Belgrade Arbitral Tribunal, the issue of non-delivery of electricity from 1 January 2022 and the proceedings against BiH before the International Centre for Settlement of Investment Disputes (ICSID) arbitral tribunal in Washington, in which the basis of the claim and, furthermore, the amount of the damages resulting from the violation of the rules on the protection of foreign investment, will be determined, remain open.