Croatia: HEP threatens with arbitration in NPP Krsko management dispute

, SEE Energy News

Croatian state-owned power utility HEP has threatened with arbitration if Slovenian side continues to obstruct the appointment of the new Croatian member of the Management Board of co-owned nuclear power plant Krsko.

Last week, the Shareholders’ Assembly of NPP Krsko failed to to agree on extending the mandate of the current plant’s CEO Stane Rozman for another five years. The Assembly was supposed to vote for the reelection of Rozman, who has been CEO of NPP Krsko for the last 30 years, but the voting was postponed although Rozman’s current mandate expires on 10 April. According to Slovenian media, in order to gain greater influence in the distribution of works on the modernization and maintenance of the plant, Croatian co-owners wanted to condition their vote for the reelection of Rozman with the change of Croatian member in the two-member Management Board of NPP Krsko. Currently, Croatian member of the Board is Hrvoje Perharic who has another year and a half until the end of his mandate. Slovenian side did not accept these terms.

HEP argues that they want to change the current member, although his mandate did not expire yet, in order for both members of the Board to have concurrent mandates. Croatian side wants to appoint Sasa Medakovic as the new member of NPP Krsko Management Board, who is currently head of the state Institute for Nuclear Safety, but Slovenian side opposes to that appointment, claiming that Medakovic does not have the necessary qualifications for that position.

The two countries have already been involved in arbitration proceeding over energy disputes. In November 2015, International Center for Settlements of Investment Disputes (ICSID) issued a judgment, according to which Slovenia must pay to Croatian power utility HEP over 40 million euros for undelivered electricity from nuclear power plant Krsko in the period between 1 July 2002 and 19 April 2003. In its decision, ICSID ruled that Slovenia has to pay about 20 million euros in damages to HEP, along with additional accrued interest and additional 10 million dollars in order to cover HEP’s costs in this legal process.