After almost ten years, the Belgrade-based Arbitration Tribunal has issued a partial decision that Elektrogospodarstvo Slovenije (EGS-RI) is entitled to EUR 67 million in compensation for non-delivery of electricity from the Ugljevik Thermal Power Plant in the Republic of Serbia in the period from June 2011 to December 2021, plus default interest from 1 January 2022 until the payment date. EGS-RI was successfully represented by Holding Slovenske elektrarne (HSE) throughout the arbitration proceedings, in accordance with the Government’s decision. “This is a remarkable success for the HSE in the long-running process of asserting an undisputed right of the Slovenian electricity industry arising from past investments,” says Dr Tomaž Štokelj, Managing Director of HSE, on the decision of the Belgrade ad hoc Arbitration Tribunal, which can no longer be appealed.

EGS-RI participated in the construction of the Ugljevik Mine and Thermal Power Plant (RiTE Ugljevik) in the period from 1981 to 1991. The dispute, connected to its investments in Ugljevik PP, goes back to June 2014. At that time, HSE in the name of EGS-RI filed a request for ad hoc Belgrade-based arbitration against RiTE Ugljevik company. The EGS-RI dispute concerns investments in the construction of a mine and a thermal power plant and a total of more than 5 TWh of undelivered electricity owed. HSE managed the arbitration procedure against RiTE Ugljevik based on EGS-RI authorisation. Uroš Podobnik, Business Director of HSE, who with the legal team at HSE harmonised the arbitration procedure on the Slovenian side said: “The years of effort of HSE’s expert team, which, together with the lawyers involved, acted in the arbitration, have been rewarded.” This is another major step in proceedings against foreign entities before foreign fora, of which we can be justifiably proud.” This is the second major success of HSE on the international judicial stage. Recap: In 2021, HSE and TEŠ with General Electric signed an out-of-court settlement for the benefit of TEŠ, which was worth EUR 261 million.

During the proceedings, the arbitration tribunal will also decide on the amount of interest for the period between 12 June 2011 to 31 December 2021. The issue of the undelivered electricity from 1 January 2022 as well as the arbitration proceedings against Bosnia and Herzegovina with the international court in New York, where they will establish the foundation for the indemnification claim and the amount of the damages arising from violations of foreign investment protection rules, remain open. The investment arbitration proceedings will resume after a standstill of several years following the conclusion of the ad hoc arbitration.