Guaranteed Buyer’s costs for disputes with investors in international arbitration in Paris will amount to $2.6 million

The approximate amount of arbitration costs that can be assigned to the Guaranteed Buyer SE when the International Arbitration Court of the International Chamber of Commerce (ICC) under its arbitration rules of disputes related to green electricity purchase and sale agreements for March-July 2020 is $2.613 million, Interfax-Ukraine reports.

Guaranteed Buyer brought these calculations in a letter to the National Energy and Utilities Regulatory  Commission (NKREK), about the need to decide on setting the size of payments from renewable energy producers to cover possible arbitration costs of the state-owned enterprise.

The letter notes that renewable generation facilities that operate at the FIT or received a tariff based on the results of the auction are an enterprise with foreign investment according to the criteria of the Economic Code of Ukraine, and have chosen arbitration under the arbitration rules of the International Chamber of Commerce in Paris as the place of dispute resolution are obliged to pay contributions to Guaranteed Buyer to create a trust fund to cover its arbitration costs.

According to the information on the regulator's website, NEURC plans to adopt a resolution at the meeting scheduled for December 16, which provides for determining the amount of the contribution to create a special fund intended to cover the arbitration costs of Guaranteed Buyer for the first-third quarters of 2020 in the amount of 0.11% of the net income of the payer. Such a contribution cannot exceed 1% of the payer's net income from his activities at the relevant facility for the previous reporting period.

According to the letter from Guaranteed Buyer, the obligation to pay the fee is assigned to 17 RES-objects, which in the contracts for the sale of "green" electricity indicated arbitration in Paris as the place of settlement of disputes and fall under the definition of an enterprise with foreign investments. According to Guaranteed Buyer, the debt to these enterprises for March-July is UAH 592 million, the amount of possible charges for the amount of the debt is determined by the company at UAH 79.5 million.

According to Olha Babiy, member of NEURC, the structure of the Guaranteed Buyer’s tariff does not provide for funds to support cases in the Paris Arbitration, at the same time, the legislation provides for the collection of funds for the creation of a special fund from the producers of "green" electricity, who have chosen this type of defending their interests.

Earlier it was reported that the level of payment for electricity produced in October from renewable energy sources exceeded 90%.

Tags: renewable energy, court, NEURC, feed-in tariff, electricity market, Guaranteed buyer, debt, investors

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