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Eurohold Bulgaria seeks 500 mln euro arbitration against Romania

May 23, 2024, 11:03:46 AMArticle by Mihaela Miteva
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May 23 (SeeNews) - Energy and insurance group Eurohold Bulgaria [BUL:EUBG] said it has filed an arbitration request of over 500 million euro ($541.5 million) against Romania at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC.

Eurohold Bulgaria seeks 500 mln euro arbitration against Romania
Image source: Eurohold Bulgaria.

Eurohold and its insurance arm, Euroins Insurance Group (EIG), have launched the arbitration proceedings due to Romania's alleged failure to meet its obligations under the bilateral investment treaty with Bulgaria, including providing fair and equitable treatment to the companies, Eurohold said in a press release on Wednesday.

The two companies are seeking justice and compensation, arguing that the actions of Romanian authorities damaged the insurance group's activities in Romania and completely destroyed them in the case of Euroins Romania.

In March 2023, Romania’s financial regulator ASF withdrew the operating licence of Euroins Romania and requested the launch of bankruptcy proceedings. A month later, a Romanian court confirmed the insurer's insolvency and launched bankruptcy proceedings.

Then, Eurohold and EIG sent a notice of dispute to the Romanian government in October, seeking an out-of-court settlement concerning Euroins Romania, without prejudice to the group’s right to initiate arbitration proceedings. However, Romania has not used this option, Eurohold said.

"The Romanian state decided not to address the issues we raised. Moreover, it did not even attempt to discuss the subject with us. In addition, the Romanian authorities fully neglected our constructive proposals to resolve the dispute and save damages and costs the ASF imposed on the Romanian citizens by illegally revoking the licence of Euroins Romania. Therefore, we are moving forward with the arbitration proceeding as the next logical step," EIG CEO Todor Danailov said in the press release.

Eurohold and EIG have enlisted multinational law firm Pinsent Masons and Bulgarian business law firm Djingov, Gouginski, Kyutchukov & Velichkov (DGKV) as advisors on the arbitration process.

Shares in Eurohold last traded on Wednesday when they closed at 1.54 levs on the Bulgarian Stock Exchange, bourse data show.

($ = 0.9234 euro)

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