Republika Srpska (RS) is obligated to pay 90 million BAM in damages to the Slovenian company “Viaduct” due to the unilateral termination of the concession agreement for the construction of hydroelectric power plants on the Vrbas River.
This is the final decision of the Arbitration Council in London, which rejected the request of RS, that is Bosnia and Herzegovina (BiH), to annul the arbitration decision from 2022, by which BiH is obliged to pay “Viaduct” 90 million BAM in damages.
RS attempted to find a way out by continuing the proceedings and submitted a request to annul the decision. Along with this request, the RS Government provided an unconditional guarantee to pay the debt if the decision was not annulled.
However, the request was not accepted, so the RS authorities will face a significant financial challenge.
The legal representative of “Viaduct,” Predrag Baros, confirmed that the decision was made on May 1st and that the request to annul the arbitration decision was rejected in its entirety.
“The request to annul the arbitration decision was rejected in its entirety, so the arbitration decision from April 18th, 2022, remains in force. Also, with this decision, the blockade of the enforcement procedure has been lifted, and it has been decided that each party will bear its own legal representation costs,” said Baros.
The arbitration dispute arose after “HES Vrbas,” which was supposed to build hydroelectric power plants on the Vrbas River, sent a compensation claim of 46 million BAM to the RS Government in October 2015 due to the termination of the contract. As they failed to reach an agreement, the majority owner of HES, the Slovenian company “Viaduct,” filed for arbitration with BiH in Washington in 2016.
It should also be mentioned that the concession award agreement worth 165 million euros was signed by the RS Government with “HES Vrbas” in 2004, planning the construction of the Krupa and Banja Luka-Niska hydroelectric power plants.
However, a year later, around 20.000 citizens of Banja Luka signed a petition against this project, and since the project was not realized for ten years, the contract was terminated in September 2015.
A year after the arbitration was initiated, the RS Government signed an agreement with the Council of Ministers of BiH, undertaking to pay all the costs of the arbitration proceedings, Biznis Info writes.
E.Dz.
