13 Jul 2018

Case Closed: Energy Community Drops Dispute Against EPS and Republic of Serbia Over Kolubara B Project

Gecić Law has successfully advised the Republic of Serbia and EPS, one of the largest energy companies in the region, in a probe led by Energy Community Secretariat regarding alleged State support for the multi-million-euro Kolubara B project.

On Monday, June 25, 2018, the Energy Community Secretariat announced the parties reached an amicable solution bringing the two-year long case to an end.

The Kolubara B power plant project will enable EPS to add 700 MW of electricity annually, constituting the most important investment in the Serbian energy infrastructure in the last four decades.

The ruling not only confirmed our team’s unrivaled expertise in EU and energy law, but also marks another ‘first’ in introducing a new law & economic approach to Energy Community disputes.

On July 15, 2016, the Secretariat commenced dispute resolution proceedings against the Republic of Serbia due to an alleged failure to abide by the Treaty Establishing the Energy Community[1], in relation to the State measures instituted in favor of EPS.  The relevant measures related to the improvement of environmental protection and exploitation technology at the mining basin ‘Kolubara B’, as well as the transfer of ownership over property connected to the construction of the thermal power plant Kolubara B.

After comprehensive support to the EPS legal team from Copenhagen Economics, a competition economic advisor, a thorough legal and economic assessment of State measures was made and subsequently submitted to the Serbian Commission for State Aid Control (Commission). On June 11, 2018, following the reopened proceedings and an in-depth review, the Commission rendered a compliant decision for the first two measures and deemed the third measure not to constitute State aid, leading to the amicable closure of the case by the Secretariat.

A Paramount Decision for Serbian Energy Sector

The successful closure of this case not only secured the continued operations of Kolubara B, the nation’s most important energy project, but it should also pave the way for more investment and job creation in the Serbian energy industry and beyond.

I am very satisfied with the decision of the Energy Community Secretariat”, stated Bogdan Gecić , managing partner at Gecić Law. “It is a showcase of what a cutting-edge law & economics approach can achieve when put into good use.”

In regard with the positive decision for EPS, Adina Claici, director of Copenhagen Economics, said that “it is extremely gratifying to learn that the Energy Community Secretariat decided to drop the dispute against EPS and the Republic of Serbia, following our advice. Very good news for the state aid community when a robust submission including a thorough economic analysis in combination with expert legal advice has such a significant impact!”

Team of Advisors

The Gecić Law team was led by partner Bogdan Gecić and included partner Nikola Aksić, Marija Papić and associates Tatjana Sofijanić, Ivana Stojanović together with Dušan Rakitić of Samardžić/SpechtCopenhagen Economics team was led by partner Claus Kastberg Nielsen along with director Adina Claici and included managing economist Torben Thorø Pedersen and economist Christoffer Haag Theilgaard.

[1] Act on the Ratification of the Treaty Establishing the Energy Community between the European Union and the Republic of Albania, Republic of Bulgaria, Bosnia and Herzegovina, Republic of Croatia, Former Yugoslav Republic of Macedonia, Republic of Montenegro, Romania, Republic of Serbia and the Interim Mission of the United Nations in Kosovo in accordance with Resolution 1244 of the United Nations Security Council (” Official Gazette of RS”, no. 62/06)