Energy

• EVN AG v. Bulgaria (ICSID Case No. ARB/13/17);
• ENERGO-PRO a.s. v. Bulgaria (ICSID Case No. ARB/15/19);
• ČEZ a.s. v. Bulgaria (ICSID Case No. ARB/16/24).

Across these cases, expert testimony was provided by Wynne Jones, Dr Christoph Riechmann, Dan Roberts, and Matt Roberts – with support from a team of up to 20 energy sector economists.

All three major electricity utilities brought claims against Bulgaria consecutively.  These disputes covered assets across the electricity supply chain, including generation, distribution, and retail.  Our testimony covered both the merits of the claims - based on our energy market and regulatory expertise; and quantum – providing scrutiny of the Claimant’s calculations, and proposing alternative counterfactuals and methodologies for assessing damages.

The claims concerned (among other aspects) the consistency of expectations established during the privatisation process for regional electricity distribution operators, and the subsequent decisions of Bulgaria’s energy regulator.  Our merits testimony established - from a regulatory economist’s perspective - what was fair and reasonable at the time by examining reasonable investor expectations, the regulatory framework, and the Regulator’s decisions - alongside wider socio-economic developments. Our quantum analysis explored actual outcomes, measured against those reasonable expectations.  This included “in the round“ analysis of the returns that had been earned over time – capturing the overall effect of the regulatory package on returns, and zooming out from the focus on isolated and selected disputed regulatory decisions and assessing them in the relevant context of related regulatory decisions.

This integrated approach, grounded in deep sector expertise in electricity regulation, provided an internally consistent perspective on both the merits and their quantum implications.

ENERGO-PRO and ČEZ also brought claims relating to the treatment of generation assets which they owned (hydropower and thermal, respectively). Our testimony in relation to these aspects of the cases again covered both merits and quantum analysis, including complex modelling of potential electricity market price outcomes.

The ENERGO-PRO and EVN cases were decided in favour of Bulgaria. The final case, ČEZ v. Bulgaria, concluded with hearings in 2023 – with the tribunal’s decision still pending.

Our experts have been appointed to provide testimony in over 200 dispute cases, including investor state arbitrations and commercial arbitrations.  Our team has a rich history of giving evidence in a wide variety of fora, including arbitrations under UNCITRAL, ICSID, the ICC, Deutsche Institution für Schiedsgerichtsbarkeit (DIS), the Vienna International Arbitral Centre (VIAC), Stockholm Chamber of Commerce (SCC), International Centre for Dispute Resolution (ICDR, New York), Swiss Arbitration Centre as well as many regulatory bodies and courts.

If you’re interested in finding more about how we explored these issues and how we helped our client, please contact media@frontier-economics.com or call +44 (0) 20 7031 7000.