After several years of a legal battle Croatia’s power company HEP launched against the Republic of Slovenia for a delay in the delivery of electricity from the Krsko nuclear power plant in 2002 and 2003, the International Centre for Settlement of Investment Disputes (ICSID) in Washington ruled in favour of the Croatian company. 

This is great victory for HEP. The dispute against Slovenia has been lasting for several years and the process lasted for three and a half years. It had a lot of motions and two hearings. This is a big decision, favourable for HEP, HEP’s American attorney Robert Hawkins said on Thursday.

Due to undelivered electricity from the Krsko nuclear power plant (NEK) in the period from July 1, 2002 to April 19, 2003, which was a violation of the signed agreement between the Croatian and Slovenian governments, HEP in 2005 filed an arbitration process against Slovenia before the ICSID. HEP requested 38 million euros of damages from Slovenia.

The decision made by ICSID’s three-member arbitration council of June 12, which was published on the tribunal’s web site, states that “the Republic of Slovenia is liable to the Claimant for the financial value to HEP of 50 percent of the electrical power produced by NEK, or by its predecessor, JP NEK, throughout the period 1 July 2002 until 19 April 2003”.

Asked if the ruled compensation was in agreement with the HEP’s request for damages, Hawkins said that together with interest, it comes to basically the same amount.

A part of the decision of the arbitration council was remained open for further arbitration procedure before the ICSID’s Paris branch, for a hearing scheduled from July 27 to 31 when it needs to be established whether or not and to what extent HEP silently waived all claims, which is an argument that, Hawkins said, Slovenia introduced into the dispute in the eleventh hour.

Frankly, I do not understand that claim. The tribunal left the doors open for Slovenia to try to prove this defence with the waiver, he added.

He stressed that he expected the final decision in the dispute, regarding the amount of damages and the costs of the arbitration, by the end of the year.

The tribunal also judged that all past financial claims between HEP and NEK were annulled on June 30, 2002.

HEP spokesman Radomir Milisic confirmed on Thursday that the tribunal should make a decision on damages to HEP by the end of the year.