Romania’s biggest power producer Hidroelectrica, controlled by the state, has won a lawsuit filed by energy trader EFT in Switzerland.
EFT challenged Hidroelectrica’s decision to terminate their bilateral contract following the company’s insolvency in 2012. An arbitrage court in Geneva ruled that Hidroelectrica’s decision to cancel the contract with EFT was legal, according to the power producer’s former judicial administrator Euro Insol.
Hidroelectrica went into insolvency in June 2012 after accumulating over RON 4 billion (EUR 890 million) in debt. The company, which had cash-flow problems at that time, cancelled its bilateral contracts with big clients, including several energy traders. The contracts were unfavorable to Hidroelectrica and the company could sell its electricity at higher prices after canceling them. However, the energy traders sued Hidroelectrica for damages after losing the contracts.
Hidroelectrica won all the lawsuits in Romanian courts but this is the first lawsuit won in a Swiss court. EFT was asking for EUR 80 million damages invoking the wrongful contract termination.
Hidroelectrica was represented in court by Romanian law firm Leaua si Asociatii and Swiss firm Lenz & Staehelin.