Slovenia defeats UK firm's €600 million fracking compensation claim
The Washington-based International Centre for Settlement of Investment Disputes (ICSID) has rejected a €600 million claim by UK company Ascent Resources against Slovenia over a gas project in the east of the country, a case that could have wide-ranging implications beyond Slovenia's borders.
Ascent Resources and its Slovenian subsidiary Ascent Slovenia formally submitted a request for arbitration against Slovenia in the summer of 2022 following complications in the country's green-lighting their project to extract gas by hydraulic fracturing, also known as fracking, in Petišovci, CE Report quotes The Slovenia Times.
The companies claimed Slovenia had prevented the development of the Petišovci oil and gas field and thus violated a bilateral investment agreement between the UK and Slovenia, and the Energy Charter Treaty.
The State Attorney's Office said it had received the arbitration decision in which the ICSID unanimously rejected all claims by Ascent Resources and Ascent Slovenia, and ordered the two companies to pay the state €3 million in costs of procedure.
The dispute dates back to 2019, when the Slovenian Environment Agency said an environmental impact assessment was required for the fracking project, a decision which was later upheld by the Administrative Court.
Ascent claimed that the environmental impact assessment was not required and that the agency was biased against the investors, and politically motivated.
In May 2022, changes to the Mining Law took effect imposing a complete ban on fracking, in what Ascent saw as the culmination of the country's campaign against it.
Slovenia, however, argued before the ICSID that the fracking ban had been imposed in the interest of protecting the environment and was not discriminatory against Ascent Resources.
State Attorney General Ana Kerševan said the decision set a precedent when it came to fracking. She expects that it will have broader international implications.
The ICSID decision is final and Kerševan said there were very few potential legal avenues to overturn it.
Photo AI
