PM Seeks Options for Appealing Arbitration Award for Belene N-plant Equipment

Sofia, September 29 (BTA) - Bulgaria's National Electricity Company (NEK) has been advised by its legal counsel against appealing an international arbitral award concerning the Belene N-plant project due to the possible cost and as interest on the original award would continue to run during the challenge period. This transpires from a summary by White and Case, the law firm that represented NEK in the Belene case at the International Arbitration Court in Geneva, on some matters concerning the final arbitral award, that was published on the government website Wednesday.

Earlier the same day, Prime Minister Boyko Borissov instructed the Economy Minister to provide a written opinion on the reasons why Bulgaria may or may not appeal the international arbitral award ordering Bulgaria to pay millions of euro for equipment that had been produced by Russia for the Belene N-plant project before it was scrapped by the Bulgarian government.

The summary by White and Case says that Atomstroyexport brought seven claims for a total of over 1.1 billion euro. The arbitration court rejected almost half and basically awarded the claims for the production equipment that has been manufactured.

The arbitration award also rejected most of NEK's counterclaim.

The awarded payments include 539,904,401 euro and 221,274,794 rouble, 11,943,108 legal costs and daily interest and penalty to the amount of 43,634 euro per day applicable from May 2, 2015.

The law firm says that it follows from the arbitration decision that NEK is liable for its contractual obligations but is not liable for the abandonment of the project.

White and Case explain that in some cases a decision by the arbitration court can be corrected due clerical, computational or typographical.

On July 15, 2016, NEK lodged an appeal for a correction of the award and asked for interpretation regarding some matters. The parties have then made further submissions and now the court is expected to make a decision.

Atomstroyexport have already accepted four of seven errors NEK had identified. Each of these will reduce the amount payable by NEK, White and Case say.

They further say that one awards a issued, they are final and binding. "They cannot be appealed like court judgments often can be," the summary says.

NEK also had the option of trying to challenge the award in Switzerland or to resist the award's enforcement.

In the first case, the comment by the White and Case lawyers is that the grounds for challenging the award were very limited and that the Swiss courts rarely accept challenges. Based on their advice, NEK did not decide to challenge the award and the time limit for a challenge has expired.

As for resisting the enforcement, NEK can try to do that once Atomstroyexport starts any enforcement proceedings - which it has not to date. However, both Bulgaria and Russia are signatories to the new York Convention on the Enforcement and Recognition of Foreign Arbitral Awards which provides that national court judges are obliged to enforce foreign arbitral awards presented to them in most circumstances.

The Convention sets out limited exceptions to the general rule, which makes it unlikely that NEK would be able to successfully resist the award enforcement in Bulgaria, according to White and Case. Atomstroyexport might also try to have the award enforced in any other country where NEK has assets, the summary concludes.