The Republic of Srpska (RS) has lost 45 million euros in a dispute before the arbitration court in Washington. The arbitration procedure was launched by the Slovenian company Viaduct, due to the unilateral termination of the concession agreement for the construction of two hydropower plants on the Vrbas river.
In September 2016, Slovenian company Viaduct has filed a request to initiate arbitration procedure in order to seek compensation for damages caused by violating the provisions of the agreement on the protection of investments between Slovenia and Bosnia and Herzegovina, as well as the provisions of the Energy Charter Treaty also signed by both Slovenia and BiH.
Slovenian investor, through its local subsidiary HES Vrbas, has concluded a concession agreement with RS Government on 25 November 2004 for the construction of two hydropower plants on Vrbas river (HPP Krupa with 48.5 MW of installed capacity and HPP Banja Luka with 37.2 MW), which was terminated on 29 September 2015 due to non-realization.
The request to initiate arbitration proceedings was sent to the International Center of Settlement of Investment Disputes (ICSID) in Washington. Viaduct seeks 51 million euros in compensation from BiH. Bosnia and Herzegovina is only legally sued because it is impossible to address the Republic of Srpska as respondent in the arbitration proceedings. The claim of 51 million euros is almost double the amount (23.5 million euros) which was initially claimed by HES Vrbas in late 2015.
