IN THE CASE OF ENERGY HOLDING: "Hidroelectrica" will keep the situation of force majeure

• The Chamber of Commerce and Industry of Romania had suspended the Approval of Force Majeure granted to "Hidroelectrica"

"Hidroelectrica" will keep the provisions concerning the force majeure situation in the contract concluded with "Energy Holding", according to the ruling rendered on Thursday by the Court of Appeal of Bucharest.

According to a press release of the company, the court has decided to suspend the execution of the Resolution issued by the Managing Office of the Chamber of Commerce and Industry (CCIR), by which the Force Majeure Approval granted to "Hidroelectrica" for the contract concluded with "Energy Holding" was revoked, as it considered that the decision in question "shows serious signs of illegality".

"This document revoking the approval, was abusively issued at the request of the lawyers of < Energy Holding > by the Chamber of Commerce, which claimed that the approval of the force majeure of September 2011 had not been signed by the chairman of the CCIR", "Hidroelectrica" officials say.

Supported by "Hidrosind"- the union organization of the employees of "Hidroelectrica", the company requested that the Court of Appeal issue a ruling to suspend the Resolution, which would have caused "Hidroelectrica" to be required to deliver to "Energy Holding" all the amount of energy provided in the contract, including for the two months of when the license of force majeure has produced its effects.

The important losses which the decision of the CCIR to suspend the case of force majeure can cause to "Hidroelectrica" and to the national energy grid was one of the reasons why the Court revoked this decision.

According to the press release, "Energy Holding" also intervened in defense of the Romanian Chamber of Commerce and Industry, but the Court of Appeal rejected the intervention of this company, deeming it unfounded.

The ruling of the court issued at the end of last week will remain in effect until the first hearing of the litigation between the electricity maker and the CCIR, with the latter being taken to court by "Hidroelectrica" in order to have it suspend the case of force majeure.

Similar approvals, which certified the existence of this situation, were given for all the contracts to supply electricity conducted by the company, meaning that "Hidroelectrica" only provided all of the beneficiaries of the contracts with electricity generated in its own hydroelectric plants.

Iulian Iancu, the chairman of the Committee for Industry and Services of the Chamber of Deputies, repeatedly said that the suspension of the approval which instituted the situation of force majeure at "Hidroelectrica" represents "a handicap for the company". He said that "Hidroelectrica" would be forced to replace energy generated at a low cost with energy produced using gas and coal, which is two or three times as expensive, and export it cheaply, which will cause the Romanian state to lose money.

Constantin Trihenea, the former general manager of "Hidroelectrica" recently said: "The Board of Directors decided, through a vote, to file a criminal complaint against those who voted without reviewing the situation. Everybody knows that there is a drought, that hydroelectric energy requires water to be generated, and the fact that the one who cancelled the document says he doesn't care shows that he actually wants something completely different (...) I have also notified < Energy Holding > that the elimination of the force majeure situation can not be implemented and that we will continue to apply it just like we have announced at the end of September, arithmetically, for each of the parties we have contracts with".

Constantin Trihenea emphasized that in October, the company made the best efforts to limit its losses, by substantially reducing certain costs: "In November, our balance sheet will reach breakeven, and for the end of the year we estimate seeing a profit, less than what it used to be, but under no circumstances will < Hidroelectrica > end this year with a loss".

The former general manager of the company said that it will output about 15 TWh of energy this year, compared to the over 19 TWh it generated in 2010.