Will the two new nuclear reactors at Dukovany Power Station ever be built? The vital project worth more than CZK 400 billion has ground to a halt, stalled by an interim injunction issued by the Regional Court in Brno. So what happens now? And what could happen next?
French corporation EDF recently temporarily blocked the state from signing a contract with South Korea’s KHNP to build the two new nuclear units at Dukovany.
Potential scenarios going forwards
The plant operator, EDU II, can apply to have the injunction overturned. It could also lodge a cassation appeal with the Supreme Administrative Court, but proceedings at this level can last anywhere from several months to up to two years. Which could prove highly problematic.
What role might the Office for the Protection of Competition play? Could the state be liable for damages?
Milan Kučera, partner at law firm PORTOS and an expert in public procurement, outlines the possible scenarios.
What procedural options does EDU II currently have? Could it seek a stay of enforcement or other extraordinary measures to keep the contract talks alive?
By definition, stay of enforcement of the Regional Court’s decision – the preliminary injunction – is not an option.
The injunction explicitly prevents the contract from being signed until a ruling is made on the administrative action. However, EDU II can still file a motion with the same court to have the injunction lifted.
How does the cassation process work here? Are there fixed deadlines?
There are no binding deadlines for the Supreme Administrative Court to decide on a cassation appeal (which, according to information available to Ekonomický deník, EDU II has already lodged – ed.).
In general, these proceedings take between a few months and two years. However, given the far-reaching consequences for the public interest and national energy policy, a faster ruling – within several months – is more likely in a case of this magnitude.
Neither the government nor the ministry can intervene directly
What role can the state or the Office for the Protection of Competition play in these proceedings?
The Office for the Protection of Competition is a direct party to the proceedings, whether we’re talking the administrative action or the cassation appeal, so it has full procedural standing and can make submissions and propose evidence.
The government and the Ministry of Industry and Trade are not parties. However, they can comment publicly on the matter, and the anti-trust authority may solicit their views and present these as part of its line of argument.
Can the Supreme Administrative Court overturn the injunction? And if so, on what grounds?
Yes, the court can lift the preliminary injunction.
It may do so if it finds procedural flaws, or if it determines that the public interest in concluding the contract with KHNP outweighs the applicant’s interest in blocking it.
What outcomes are now possible? Could EDU II or the state claim damages if EDF’s action fails?
In theory, yes. If the court dismisses EDF’s action, this could provide grounds for a damages claim against the company. However, EDU II would need to prove that damage actually occurred, determine the amount, and demonstrate that the loss was directly caused by the injunction or the action. Such proceedings are likely to take years, though, making any real chance of compensation largely academic for now.
What practical impact could a delay of several months have?
A delay of just a few months in signing the KHNP contract could cost EDU II hundreds of millions of crowns.
Although there are no legal tools to expedite decisions by the Supreme Administrative Court, it is not unusual for the court to act more swiftly in high-profile cases, even without statutory deadlines.
Source: Ekonomický deník
Mgr. Milan Kučera
Partner and Attorney
