Pro média

STATEMENT ON THE SUPREME COURT’S DECISION ON UNITED ENERGY’S ACTION FOR A DECLARATION

6.1.2010

The decision of the Supreme Court of the Czech Republic on the action for a declaration does not concern the substance of the dispute, because the court has not examined the validity of the agreement on coal supplies to United Energy at all. The Supreme Court only examined the formal legal aspects of the solution [in question] and in this decision it has definitively confirmed that the dispute over the validity of the agreement should be addressed via a different legal approach, specifically via an action for specific performance.

MUS (now Czech Coal) terminated the long-term agreement on coal supplies to United Energy in 2006. Having served the notice of termination, Czech Coal de facto stopped observing the agreement and under a threat of interrupting coal supplies, it coerced United Energy into short-term one-year agreements on coal supplies, with coal prices very much above the level of average market prices in the Czech Republic. Because of Czech Coal's reluctance to supply coal and its continuous pressuring for steep coal price hikes, United Energy has been compelled to discontinue taking coal from Czech Coal and secure its coal supplies from other suppliers. Last year, United Energy built a new coal storage facility at high cost, and it has not been taking coal from Czech Coal since the beginning of this year.

The fact that the prices billed by Czech Coal to United Energy were unreasonably high has been confirmed by a decision of the Ministry of Finance, as the authority in charge of supervising compliance with the law on prices; as early as 2008 the Ministry imposed a fine of CZK 37.5 million on Czech Coal (or, as applicable at that time, MUS of the Czech Coal Group) for MUS's abuse of its market position and charging unreasonably high prices for its coal.

United Energy is one of the leading Czech independent electricity and heat producers. It operates a combined heat and power generation plant in Komořany near Most, having a total installed electrical capacity of 239 MWe. It supplies heat to 35,000 households in the towns of Most and Litvínov, and also to a number of commercial properties, industrial companies, health facilities, schools, etc.

UNITED ENERGY is part of the ENERGETICKÝ A PRŮMYSLOVÝ HOLDING group.

Martin Maňák

Director of Communications

Energetický a průmyslový holding