Press Room

Fresh success for SAPE in international arbitration award relating to the privatisation of Electrica Moldova

Bucharest, 20.02.2017 - Zamfirescu Racoți & Partners attorneys-at-law, with the help of financial experts TPA Romania, have obtained a new final arbitration award from the International Chamber of Commerce (ICC) Paris partially accepting the counterclaim made by the management company for state-owned stakes in energy companies Societatea de Administrare a Participațiilor în Energie (SAPE) against E.ON România S.R.L. (E.ON). As a result of the ruling, E.ON is obliged to pay the amount of RON 4,070,948 plus interest to SAPE by way of compensation for infringing the minority shareholder’s rights in respect of the distribution of dividends.

The dispute arising out of the privatisation of Electrica Moldova revolved, on the one hand, around the main action brought by E.ON with the purpose of clarifying the effects derived from the exercise of put options by E.ON and, on the other hand, the counterclaim whereby SAPE requested the upholding of the contractual liability of the majority shareholder in respect of its failure to distribute dividends throughout the entire period when SAPE was a shareholder, something the financial results of the privatised company would have permitted.

The team of attorneys was led by Dr Cosmin Vasile (managing partner) and included Alina Tugearu (partner), Cosmin Cojocaru (managing associate) and Violeta Saranciuc (senior associate). The team of financial experts included Cristina Petrescu (audit & advisory partner and team coordinator) and Bogdan Acatrinei (senior manager).

“I think I’m right in saying that the problem of majority shareholders refusing to distribute dividends to minority shareholders is the eternal and most frequently encountered issue in company law. The fact that in this case this issue arose as part of a privatisation contract and in the energy field only generated additional problems of fact and law. The solution arrived at by an international arbitrator represents the correct answer in terms of the principle involved, while also sending a powerful signal to the Romanian courts facing thousands of cases revolving around the same issue of law,” said Cosmin Vasile of Zamfirescu Racoţi & Partners.

“Our analysis focused on the disclosure, from an economic perspective, of the financial results of the privatised company and the way these were used during the period in question, considering both the specific circumstances of the company and the dividend policy adopted at the level of the group to which the company belongs. We are happy to have been able to assist the sole arbitrator in this case to understand the economic and financial aspects of the dispute,” added Cristina Petrescu of TPA Romania.