Court of Cassation, No. 16-16.568

Court of Cassation, First Civil Chamber, 28 March 2018, No. 16-16.568

KOMSTROY (REPRESENTING THE RIGHTS OF ENERGOALIANS)

Vs.

THE REPUBLIC OF MOLDOVA

THE COURT OF CASSATION, FIRST CIVIL CHAMBER, delivered the following judgment:

On the single ground of appeal, taken in its first three parts:

Having regard to Article 1520-1 of the Code of Civil Procedure;

Whereas, according to the contested judgment, the company Energoalians, to whose rights the company Komstroy belongs, initiated ad hoc arbitration proceedings against the Republic of Moldova on the basis of the provisions of the Energy Charter Treaty of 17 December 1994; that the award rendered in Paris on 25 October 2003 ordered the Republic of Moldova to make reparation for the violations of the treaty obligations, to create stable, equitable, favourable and transparent conditions for investors and to ensure fair and equitable treatment; that the Republic of Moldova filed an action for annulment;

Whereas, in order to set aside the award, the judgment holds that the acquisition of a right to a debt which derives from a contract for the supply of electrical energy cannot, in the absence of a contribution, constitute an investment within the meaning of the Energy Charter Treaty.

By ruling in this manner, while the provisions of this Treaty do not specify the criteria characterising an investment, but only list, in an illustrative manner, the assets considered to be investments, the Court of Appeal, which added a condition that the Treaty does not provide for, violated the above-mentioned text.

FOR THESE REASONS and without it being necessary to rule on the other branches of the ground:

REVERSE AND ANNUL, in its entirety, the judgement handed down on 12 April 2016 between the parties by the Paris Court of Appeal; return, consequently, the proceedings and the parties to their status quo ante and, for the proceedings to be determined in accordance with the law, transmit them to the Paris Court of Appeal, otherwise composed.

Orders the Republic of Moldova to pay the costs.

Having regard to Article 700 of the Code of Civil Procedure, dismisses its claims and orders it to pay to Komstroy the sum of 3,000 euros.

States that, on the instructions of the Public Prosecutor at the Court of Cassation, the present judgment will be transmitted to be transcribed in the margin of or after the overturned judgment.

Thus done and judged by the Court of Cassation, First Civil Chamber, and delivered by the President during his public hearing of the twenty-eighth of March two thousand and eighteen.