Vattenfall vs. Germany: Nuclear Phase-Out Faces Billion-Euro Lawsuit
Swedish energy company Vattenfall reportedly plans to sue the German government, seeking massive damages related to Germany's phase-out of nuclear power. Vattenfall successfully took on the German government once before.
When Chancellor Angela Merkel decided to rapidly phase out nuclear energy in Germany this spring in the wake of the Fukushima nuclear disaster in Japan, many predicted the policy would ultimately end up in court. Now, according to a report in the Wednesday edition of the business daily Handelsblatt, Vatenfall plans to file a billion-euro lawsuit against the German government. The suit is to be filed by Christmas with the International Center for Settlement of Investment Disputes (ICSID) in Washington D.C., the paper reported.
Chancellor Merkel's government had decided in the autumn of 2010 to extend the lives of Germany's nuclear reactors beyond the deadline for nuclear phase-out set by the center-left government of Chancellor Gerhard Schröder. But following the disaster in Fukushima, Merkel's pro-nuclear course became politically unteneble and she quickly reversed course. Several reactors -- including the two operated by Vattenfall -- were shut down immediately with the new phase-out set for completion by 2022.
In June, the company demanded "fair compensation" for the losses associated with shutting down the two plants, and threatened a lawsuit. Other operators of German nuclear reactors also announced similar intentions at the time. RWE and E.on have already sued the federal government over the nuclear power tax.
'Fair and Equitable Treatment'
According to Handelsblatt, Vattenfall has an advantage in seeking compensation because the company has its headquarters abroad. As a Swedish company, Vattenfall can invoke investment rules under the Energy Charter Treaty (ECT), which protect foreign investors in signatory nations from interference in property rights. That includes, according to the treaty's text, a "fair and equitable treatment" of investors.
The Swedish company has already filed suit once against the German government at the ICSID. In 2009, Vattenfall sued the federal government over stricter environmental regulations on its coal-fired power plant in Hamburg-Moorburg, seeking 1.4 billion plus interest in damages. The parties settled out of court in August 2010.
mbw -- with wire reports
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