Czech Supreme Court rejects Railway Administration's appeal over unconsumed electricity and rules in favour of ČEZ Prodej

The Supreme Court rejected the Railway Administration’s appeal against a ruling that ČEZ Prodej is entitled to damages of almost 727 million crowns plus interest for traction electricity that was not taken. It partially upheld ČEZ Prodej’s appeal, however, and ordered the Prague High Court to examine the remaining part of the claim originally brought, amounting to around 130 million crowns. The Czech News Agency learned this from the official notice board, where the judgment has been made temporarily available.

The High Court recognised ČEZ Prodej’s claim for damages, but reduced the amount by approximately 15 percent. It concluded that the contract between the two entities allowed for a correction of up to 15 percent in the amount of energy taken. The parties to the contract, however, disagreed over how it should be interpreted. The High Court should therefore now examine more thoroughly the parties’ actual intentions.

„Nor did it subject the wording of the contract itself to proper linguistic, systematic and logical interpretation. It therefore failed to meet the requirements arising from case law, and its legal assessment is consequently incorrect,“ the Supreme Court’s decision states. In 2023, the court had already granted the Railway Administration’s request to suspend enforcement of the judgment, at least with regard to the interest amounting to hundreds of thousands of crowns.

This time, however, it rejected around twenty legal questions raised in the Railway Administration’s appeal.

The contracted energy was intended to serve all rail operators. In 2010 and 2011, however, the Railway Administration took significantly less electricity than it had originally committed to. In the meantime, legislation had changed, allowing rail operators to buy electricity directly. At the prices in force at the time, this also worked out cheaper.

Years of disputes with ČEZ Prodej followed, pursued along several lines. Courts at every level ruled repeatedly, ultimately in favour of the energy company, which considered the sums claimed to be lost profit.

At the end of last year, the Constitutional Court rejected the Railway Administration’s complaint in a parallel dispute involving more than 700 million crowns plus interest. The Railway Administration argued, for example, that by allowing Czech Railways to take electricity independently, it had merely responded to a new legal obligation arising from the law and implementing regulations. The complaint also pointed out that the contract between the Railway Administration and ČEZ Prodej allowed the scope of electricity consumption to be specified unilaterally. The Constitutional Court justices considered the complaint manifestly unfounded.