Baker Tilly TPA

Largest international arbitration award ever obtained involving a Romanian party

14.02.2017

Zamfirescu Racoți & Partners (ZRP), in their capacity as attorneys at law, and TPA Romania, in their capacity as financial experts, both selected through a procurements procedure to represent the management company for state-owned stakes in energy companies known as Societatea de Administrare a Participațiilor în Energie (SAPE), have obtained a final arbitration decision from the International Chamber of Commerce Paris (ICC Paris) partially accepting the case brought by SAPE against Enel Investment Holding B.V. and Enel S.p.A (Enel), who as a consequent are obliged to pay the amount of EUR 401,209,541.29. 

The dispute arising out of the privatisation contract for Electrica Muntenia Sud essentially revolved around the following issues: the exercising of sales options (Put Options) in respect of a 13.57% stake held by SAPE in the former Electrica Muntenia Sud, the legal mechanism through which the shares are transferred to Enel; and the establishment of the price for said stake based on the formula provided in the privatisation contract. 

The team of attorneys was led by Dr Cosmin Vasile (managing partner) and also 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). 

"The arbitration ruling is sensational given the very large sums of money awarded. From our point of view, this arbitration, which was far more complex than might first appear, raised many legal problems in terms of civil law, privatisation and, in particular, the energy field, and it involved a range of specific issues pertaining to this regulated market. Our satisfaction resides in the acceptance of an overwhelming majority of the positions and interpretations put forward and developed during the dispute by the Romanian party,” commented Cosmin Vasile of Zamfirescu Racoţi & Partners. 

“Beyond the legal aspects, the issue of calculating the price for the Put Option Shares involved a formidable amount of work from a financial and accounting point of view, in terms of the presentation of all possible calculation variants, which took into account the positions of the parties in respect of their interpretation of the contractual formula agreed in the privatisation contract. The fact that the Court of Arbitration chose one of the calculation variants proposed by us serves to confirm of the usefulness and objectivity of our contribution to this case,” added Cristina Petrescu of TPA Romania.

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