October 16, 2017
Invenergy submits notification of dispute to Polish Government under Bilateral Investment and Energy Charter Treaties
Approximately $700 million claim by U.S. investor is part of a “surge of international disputes” against Poland; identifies “coordinated conspiracy” by Polish Government to undermine rule of law.
WARSAW (October 16, 2017) – Invenergy LLC, a globally recognized U.S. energy company, and other international companies forming the energy conglomerate (“Invenergy”), today submitted a letter to senior Polish Government officials, including its President and Prime Minister, serving as formal notification of dispute under the U.S.-Poland Bilateral Investment Treaty (“U.S.-Poland BIT”) and the Energy Charter Treaty (“the ECT"), signatories of which include fifty-two countries and the European Union.
The notification letter identifies alleged unlawful and coordinated acts “tantamount to an expropriation” by Poland that have destroyed the financial viability of Invenergy's investments in several wind farms, with damages amounting to approximately $700 million. The action is part of what one major Polish media outlet recently described as a potential “surge of international disputes”, as Poland is already currently party to 11 international arbitration proceedings. Meanwhile, in recent weeks, the European Commission has raised “grave concerns” that the Polish government is undermining the rule of law in the country.
Bilateral investment treaties protect investors whose rights have been violated by another country, and that is what has happened to Invenergy in Poland,” said Invenergy Chief Legal Officer Michael Blazer. “While the Polish Government’s disregard for the rule of law continues to escalate, we are working to secure our rights, and other investors are watching.
The notification letter accuses Polish government authorities of orchestrating the unlawful termination of long-term commercial contracts. In 2010, Invenergy entered into fixed-price, long-term energy contracts with Polish state-controlled utility companies. Invenergy accepted what were then below-market prices for renewable energy from its wind farms in return for the stability provided by the long-term contracts. The Government later directed its state-controlled energy companies to terminate Invenergy’s long-term contracts under various pretexts.
The Polish Government took deliberate actions to depress renewable energy market prices to unsustainable levels. Due to the Polish Government’s unlawful termination of commercial contracts in combination with these actions, Invenergy was forced to sell its production into the market at prices significantly lower than the contracted amounts, resulting in major financial losses.
Invenergy’s notice letter states that the coordinated actions by the Polish authorities constitute a breach of investment protection obligations arising under the U.S.-Poland BIT and the ECT. Invenergy has stated its intent to submit the dispute to international arbitration if no settlement is reached within six months.
Invenergy is actively pursuing several other legal actions in the Polish courts against state-controlled entities. The Polish Supreme Court has already ruled in Invenergy’s favor in the case of Energa-Obrót S.A., finding that the state-controlled utility acted unlawfully in attempting to terminate its contractual obligations with Invenergy.
Invenergy drives innovation in energy. Invenergy and its affiliated companies develop, own, and operate large-scale renewable and other clean energy generation and storage facilities in the Americas, Europe and Asia. Invenergy's home office is located in Chicago and it has regional development offices in the United States, Canada, Mexico, Japan and Europe.
Invenergy and its affiliated companies have developed 105 projects totaling more than 15,900 megawatts that are in operation, construction or advanced development, including wind, solar, natural gas-fueled power generation and energy storage projects. For more information, please visit www.invenergyllc.com.