Invenergy has written to the Polish government to notify it of its intention to start international arbitration proceedings over cancelled wind farm contracts.
Invenergy is alleging that Poland carried out unlawful and coordinated acts that were “tantamount to expropriation” and that have destroyed the financial viability of several wind farm investments made in Poland in 2010.
The notification letter brings the dispute under the US-Poland Bilateral Investment Treaty and the Energy Charter Treaty, signatories of which include fifty-two countries and the European Union. Invenergy is seeking $700 million in damages.
“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.”
In 2010, Invenergy entered into fixed-price, long-term energy contracts with Polish state-controlled utility companies for electricity generated by four onshore wind farms. It says that the government later directed its state-controlled energy companies to terminate Invenergy’s long-term contracts “under various pretexts”.
Invenergy says that it is continuing to operate its Polish wind business, but that it has been forced to sell energy generated into the market at prices “significantly lower than the contracted amounts”, resulting in major financial losses.
In July 2017 Invenergy launched legal action against Polish firm Tauron for unlawful termination of contracts, and says that it is still pursuing this. The Polish Supreme Court has already ruled in Invenergy’s favour 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.