In a startling frontpage headline, Sega newspaper announces that “Foreign investors sue Bulgaria for more than 2 billion Leva”, with most of the lawsuits handled by international arbitration filed for malpractice in state energy policies. The sum may grow because there are other companies determined to take their case to an international tribunal if they fail to reach extrajudicial settlement with the authorities in Sofia. The paper quotes information from a Ministry of Finance document on the implementation of the 2016 budget. Three of the lawsuits are well known – they were filed at the International Centre for Settlement of Investment Disputes (ICSID) in Washington by the leading electricity distribution companies EVN, ENERO-PRO and CEZ. The State General Reserve Fund (SGRF) of the Sultanate of Oman, the second biggest shareholder of the Corporate Commercial Bank which went bankrupt, has also filed a lawsuit at the ICSID. In all of these cases Bulgaria stands accused of violating intergovernmental investment protection agreements. Archives show that the country usually loses lawsuits of this kind and has to pay millions in compensation to investors. In the very rare cases when it has won, the victory usually costs the budget a hefty sun. One case in point is lawsuit filed by the owners of Plama-Pleven for compensations for the bankruptcy of the refinery. In this instance the government attorneys succeeded in overturning the charges, but that cost the budget 12 million euro. International arbitration lawsuits are complicated and expensive for both sides, that is the reason why private investors do their best to reach agreement with politicians and civil servants and only file suits as a last resort. The documents show that every year the budget, i.e. Bulgarian taxpayers, pay millions in fees to lawyers and for other legal expenses. In 2016, “organizing the defence of the state interest in international lawsuits” cost the budget almost 36 million Leva or more than half of the entire annual budget of the Ministry of Finance, Sega writes.
Compiled by Stoimen Pavlov
English version: Milena Daynova
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