By JIGGSLAW. The Portuguese electric company EDP Gestão da Produção de Energia called on Portuguese courts to enforce an arbitration award that ordered the Portuguese State to pay 217,8 million euros in damages awarded for the failure of Fridão’s hydroelectric power plant.
On July 15, 2022, the Arbitral Tribunal of the EDP and Portugal arbitration notified the parties of the award related to the Fridão project dispute, in which the electrical company claimed a breach of contract by the Portuguese Government.
According to a press release issued by the Portuguese Government on July 15, 2022, EDP sought compensation for consequential damages or costs incurred as a result of a set of charges associated with the project’s development, such as administrative, financial, goods and services acquisition, internal labour costs, and statutory interest payment. The Tribunal did not award damages for financial, acquisition, and statutory costs because the project could have incurred losses if it had continued. However, the Portuguese Government must reimburse the electric company for the 217,897 million euros paid when the agreement for the exclusive rights to use Fridão for 75 years was signed.
Last week, EDP filed a claim against the State before the Lisbon Administrative Court requesting the amount awarded in the arbitral award (see “EDP avança com ação para obrigar Estado a devolver 218 milhões de euros“, Miguel Prado, Expresso, 16.12.2022).
The Portuguese Government Appeal
The Portuguese Government appealed the arbitral award invoking an administrative law error. According to the Minister for Environment and Climate Change, the Government can refuse reimbursement of the amount awarded by the arbitral tribunal while the appeal is pending (See “Barragem do Fridão. Estado recorreu para o Supremo e aguarda decisão antes de devolver 218 milhões à EDP“, Ana Suspiro, Observador, 10.11.2022).
