Bosnia: Arbitration case Slovenia Elektrogospodarstvo vs TPP Ugljevik

27. August 2015. / SEE Energy News

The agreement on the choice of the third arbitrator has created the conditions for the start of arbitration between the Bosnia Republika Srpska Mine and Thermal power plant (TPP) Ugljevik and Slovenian “Elektrogospodarstvo – razvoj in inžiniring “, by which Slovenians seek compensation from BiH in the amount of almost1, 5 billion EUR.

Arbitration of the pre-investment in the construction of TPP Ugljevik, will start on October 30th, if BiH side pays advance for the proceedings costs.

However, the International Centre for Settlement of Investment Disputes in Washington, where the arbitrage will be run, informed both sides in this dispute that they must pay 150,000 dollars by August 6th this year to cover the costs of the procedure in the next six months, including the costs of the first session, which will be held in Hague. Then the Public Attorney’s Office, responsible for coordinating, requested from this Center that the deadline for payment of these funds prolonged for September 6th this year, which was approved. Otherwise, the costs of the proceedings for BiH will pay RiTE Ugljevik and RS.

In the meantime, Slovenia and Bosnia and Herzegovina have agreed on the choice of the third arbitrator in this proceeding, Christopher Greenwood from Great Britain, who will be the chairman of the tribunal. We recall that Maja Stanivukovic, professor from Serbia, has been proposed on BiH side for an arbitrator, and on the Slovenian side Nov Paulson, from the United States.

BIH side argues that there are arguments for getting dispute, while Slovenians claim the same, and which in this case refers to a Law on succession and the self-management agreement, and the whole case is characterized as a dispute between the two countries, which from its beginning could take about a year or two.

Mladjan Mandic, BiH Deputy Attorney, confirmed that the Slovenian side agreed on the choice of the third arbitrator in the proceedings. According to him, it is now required to pay an advance of 150,000 dollars for legal costs in the next six months, noting that from BiH side was requested the deadline of payment these funds for one month, which was approved.

“This money must be paid on time, because we put in question to lose the dispute. These costs pay RiTE Ugljevik and RS, and also there is a support from the Council of Ministers, where they say that they can turn for assistance to the Ministry of BiH Finance” said Mandic.

As stated, the first session in this arbitration is scheduled for October 30th this year, and the first constituent session of the arbitral tribunal will be held on September 10th this year, by telephone.

According to the information related with the complaint of “Elektrogospodarstva Slovenije- razvoj in inžiniring ” Maribor, which will be consider at the next session of the Assembly of Shareholders of RiTE Ugljevik, also the Slovenian side initiated two proceedings against the company related to the same dispute, that are pending. The first is the International Centre for Settlement of Investment Disputes in Washington and there was sued the State of Bosnia and Herzegovina and under the Law on Serbian Arbitration the other is in front of ad hoc arbitration in the Commercial Court in Belgrade, on the same basis and the same amount of the claim for damage.

We remind that the Slovenians filed a lawsuit against BiH to the International Centre for Settlement of Disputes in Washington still in mid-June last year. The compensation requirement is 750 MEUR, and if the country loses the case, it could amount with all interest rates three 1, 5 MEUR. To explain, Slovenia in 1981st, invested one and BiH two thirds of the money in the construction of Ugljevik, which began operations in 1985th. Thermal power plant was obliged to regularly deliver produced electricity to Slovenia in accordance with the amount of the invested funds in its construction. And so it was until the beginning of the war in the former Yugoslavia, when the delivery was interrupted, while during the war and bombing it was destroyed a transformer station in Croatia, through which electricity was supplied to Slovenia.

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