Czech court blocks Dukovany contract signing, rules in EDF's favor

A court in Brno today issued a preliminary injunction blocking the final signing, scheduled for Wednesday, of a contract between Elektrárna Dukovany II (EDU II) and tender winner South Korea’s KHNP to build nuclear units at Dukovany. It did so at the request of French company EDF, which filed a lawsuit challenging a decision by the Office for the Protection of Competition (ÚOHS). The office had ruled that the tender was conducted properly. The court announced the injunction on its website. The ban on signing the contract will remain in force until a decision is made on EDF’s lawsuit.

The preliminary injunction can be challenged by filing a cassation complaint with the Supreme Administrative Court. ČTK is seeking a comment from the competition authority. EDU II announced today that if EDF’s lawsuit is found to be unfounded, it will seek damages from the French company.

“The key point is that if the contract were signed, the French bidder would irreversibly lose the opportunity to win the public contract, even if the court subsequently ruled in its favor in the legal proceedings,” the court said in a press release.

Before issuing the preliminary injunction, the court also considered the seriousness and merits of the lawsuit. EDF challenged in particular the ÚOHS’s refusal to examine its objections to the tendering authority’s conduct. In the challenged decision, ÚOHS Chairman Petr Mlsna acknowledged that EDU II was required to comply with at least the basic principles of public procurement and that its conduct should have been subject to review, but concluded that this fell outside ÚOHS’s remit. “The Regional Court in Brno provisionally assessed the claimant’s arguments against this view as relevant and fairly strong, and therefore issued the preliminary injunction. This does not yet mean that the claimant will succeed in the subsequent court proceedings,” the court noted.

EDU II, which is 80 percent state-owned and 20 percent owned by ČEZ, had planned to sign the contract on Wednesday. EDF filed its lawsuit on Friday. Today, EDU II called on EDF to publish its bid to complete the Dukovany units. It maintains that KHNP’s winning bid was better in every respect. EDF does not intend to comment on the call. EDU II also said that if it is definitively established that EDF’s lawsuit was unfounded, it is determined to seek any damages from the French company.

The government decided last July to build two new nuclear reactors. It chose South Korea’s KHNP over France’s EDF. Another bidder, Westinghouse, had already been excluded from the competition. Both EDF and Westinghouse challenged the tender with the competition authority, which considered the matter for several months. It ultimately rejected their objections, and Chairman Mlsna dismissed the companies’ appeals on 24 April.