Enel wins case brought on by government



August 3, 2016



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August 3, 2016



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The Arbitration Court in Paris ruled against Romania’s state energy holdings administration company SAPE SA in the case for alleged breaches of privatization contract by Italian Enel SpA.

The government earlier lost processes involving E.ON and ČEZ, which had also acquired branches of state-owned Electrica SA. The current case was for damages of over EUR 900 million for Electrica Muntenia Sud, while now SAPE needs to pay EUR 1.5 million for trial costs, domestic media said in late July.

Enel holds three subsidiaries for power distribution and supply: Muntenia Sud, which includes Bucharest, and the firms for the southwestern area of Banat and the southeastern area of Dobruja, or Dobrogea in Romanian. Electrica sued the investor but the agency took over after it was partially split. SAPE represents the state’s minority stakes in five of a total of eight regional power distribution networks. In the disputes, out of 24 demands formulated in April 2013, 17 have been rejected and the rest have been prescribed or considered to be in the jurisdiction of other courts, according to sources of Agerpress agency.

In November 2013, an arbitration panel dismissed a claim by Electrica the Italian company had not meet the conditions during the privatization of distribution networks Electrica Banat and Electrica Dobrogea. The case was for damages of EUR 44 million. Romania has another arbitration process with Enel: SAPE demanded EUR 500 million, claiming it breached the obligation to buy 13.57% of the shares in Electrica Muntenia Sud.

Enel said it will focus on growth in the Balkan country, confirming commitment. The company recently said it invested RON 8.6 million (EUR 1.93 million) in the first five months of this year in remote control systems and equipment upgrades in Bucharest. The latest press release said Enel Distribuţie Dobrogea concluded a series of low and medium voltage network and installation modernization works worth EUR 410,000. The measures were aimed at boosting supply safety for strategic consumers such as military units and headquarters of the Romanian Air Traffic Service Administration.

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