WARSAW, Poland, July 3, 2017 /PRNewswire/ -- Invenergy, a globally recognized American energy company, announced today that it has, through affiliated companies, filed a series of lawsuits against Tauron Polska Energia S.A. ("Tauron"), one of four major energy companies in Poland. Total damages of over PLN 1.2 billion (approximately $325 million) claimed in these four suits make this one of the largest recent commercial legal actions in the Polish courts.
These suits allege that Tauron has committed unlawful and unethical acts in causing the termination of long-term agreements with wind farms for the purchase of electricity and so-called "Green Certificates". The Polish Supreme Court condemned similar actions in a recent case against another state-controlled energy company. The Invenergy suits further allege the substantial involvement of former authorities of the Polish State Treasury in these actions.
Invenergy has been a substantial long-term investor in Poland since 2005, with investments in the country totaling PLN 2.2 billion (approximately $595 million) in eleven operating wind projects.
"We made a long-term investment in Poland with confidence that a legal framework existed to protect our investments from this type of behaviour. This case will test the assumptions of our original investment decision and signal to the market whether Poland is a country where investors can rely on the sanctity of contracts." – Michael Polsky, Founder and CEO, Invenergy, said.
In 2010, following direct negotiations with Tauron, Invenergy's affiliates signed long-term contracts with a wholly-owned and controlled subsidiary of Tauron, Polska Energia – Pierwsza Kompania Handlowa Sp. z o.o. ("PE-PKH"). Tauron had in fact insisted on making PE-PKH the contractual counterparty and assured Invenergy, its project partners and project lenders that it was a bona fide subsidiary. The contracts with PE-PKH included 15-year agreements for the purchase from the wind farms of both energy and Green Certificates, which verify the generation of renewable electricity and are a tradable commodity.
Shortly after executing the 15-year agreements, Tauron began a series of actions to release itself and its PE-PKH subsidiary of their obligations. These actions included the disposal of all significant assets of PE-PKH and the resignation, dismissal or transfer of key PE-PKH employees. Then, in July 2014, Tauron, as the sole shareholder of PE-PKH, adopted a resolution triggering the liquidation of PE-PKH with the intention of causing a de facto annulment of PE-PKH's contractual obligations. Invenergy challenged this highly unusual corporate maneuver in court, as Polish law prevents liquidation prior to settlement of contractual obligations. Tauron never formally completed the liquidation but has done nothing to reverse the overall damage caused.
In the new actions, Invenergy alleges the substantial involvement of former representatives of the State Treasury and Tauron in planning to enact through Tauron the termination of the commercial agreements between PE-PKH and the Invenergy affiliate companies. As the company's largest shareholder, the State Treasury effectively controls Tauron. A majority of Tauron's supervisory board is appointed by the State Treasury. As of 2014, the Polish Ministry of State declared Tauron to be of strategic importance to the country's economy, and today, Tauron is supervised by the Ministry of Energy.
Other energy companies similarly controlled and supervised by the Polish Government have engaged in similar attempts to bring about the improper termination of long-term agreements for the sale of energy and Green Certificates. The Polish Supreme Court has already condemned this, in the case of Energa-Obrót S.A., finding that the state-controlled utility had used a "pretext" to try to extricate itself from its contractual obligations "without valid reasons justifying it". (Supreme Court ruling dated 16 September 2016, IV CSK 751/15).
"Over several years, we made every attempt to work with Tauron and others in positions of authority to resolve this, and we asserted our rights in court cases against PE-PKH. We were met with nothing but delays, obstructions and, ultimately, silence. Today's legal actions are an unavoidable result of Tauron's refusal to honor contractual obligations and the rule of law." – Michael Blazer, Chief Legal Officer, Invenergy, said.
In the current legal actions, Invenergy is seeking compensation from Tauron for the damage caused by Tauron's actions, taken both directly and through other parties, and intends to seek such compensation for any future losses resulting from these actions. Invenergy is seeking damages under Polish regulations governing liability in tort, as well as under Polish unfair competition rules.
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.