On out-of-court settlement last week, Slovenian energy company HSE and its subsidiary which operates coal-fired thermal power plant Sostanj (TES) have signed an agreement in the amount of 261 million euros in favor of TES with General Electric (GE), related to Alstom Power’s involvement in TPP Sostanj unit 6 project. In January 2017, HSE submitted a request for arbitration before the International Chamber of Commerce, against GE related to Alstom Power’s involvement in the investment in unit 6 of TPP Sostanj in 2008. GE acquired Alstom’s power businesses in 2015. The purpose of the arbitration was to reclaim alleged damages resulting from the construction of unit 6. After more than three years of intensive work, the negotiators have reached a settlement agreement.
Its total estimated value is EUR 261 million, and is related to:
– payment in the amount of 138.7 million euros. The majority of this, 131 million, has already been transferred to the account of TES;
– supply of services for the long-term maintenance and digitalization of unit 6 of TPP Sostanj with an estimated value of effects of more than 110 million euros. The objective is advanced maintenance of the key technical equipment of unit 6 and the positive effects of the increase in availability and efficiency of unit 6;
– around 12 million euros in other savings and reimbursement of costs that HSE and/or TES would otherwise incur for operation of unit 6 of TPP Sostanj or other related activities.
As it is a settlement related to the commercial claim made by HSE and TES in arbitration, both companies have withdrawn the statement of claim in return for the above-mentioned compensation in the arbitration procedure and renounced further damages claims in arbitration. The condition for the withdrawal of the arbitration and renouncement of the claim was fulfilled with the transfer of the first installment of funds in the amount of 131 million euros to the bank account of TES on 10 March 2021.
