Positive court practice for recovery of collected 20% unconstitutional fees paid by the RES producers 22.01.2016

Our member – the law office Penkov, Markov and Partners introduced their positive court practice on claims which they have initiated on behalf of their clients – RES producers for recovery of the 20 % access fee paid by RES producers to the State Budget. Such access fee has been pronounced unconstitutional in 2014 by the Bulgarian Constitutional Court thus making the amounts collected in the period January-August 2014 practically unlawful.

Penkov, Markov and Partners explained that they are the first law office to introduce such a judicial proceeding and explained that their claims are based on a very innovative legal concept for the effect of the decisions of the Constitutional court whereas the respective court decisions, even though they have not gone though all court instances yet, will build a very positive case law paving the path toward development of the legal thinking and even the legal theory in Bulgaria. Penkov, Markov and Partners’ team further confirmed that the successful outcome of their lawsuits so far results in a huge change in the attitude of Bulgarian judges in direction of implementing the principles of Rules of Law, which is visible from the announced decisions, thus we have a positive sign for a professional and profound jurisdiction when the judges are addressed with substantiated and highly motivated claims.

Based on the general principle of European and Bulgarian Law, including the principles of the EU Functioning Treaty and Energy Charter Treaty, as well as on the practice of the European Court of Justice, the claims brought before court by the team of Penkov, Markov and Partners successfully defend the principle that everybody, including the State, shall be held liable for all damages resulting from their unlawful actions.

Even at the time of the adoption of the 20 % fee, this legal amendment was illegal as long as it led to violation of the long-term contracts for purchase of electricity. These legal changes retroactively implied sanctions for certain type of RES producers, which were discriminatory and thus were declared unconstitutional. The cases for refund of the fees were the beginning of a positive trend, which we hope to be continued and to be a base prerequisite for improvement of the investment climate in Bulgaria.

As you already know that state fee to the amount of 20 % from the incomes of the RES producers was imposed through the Budget Act for 2014 only for RES producers from sun and wind and was duly paid by them for 8 months without any corresponding service provided by the State. There was no doubt that such fee was unconstitutional even at the time of its adoption but nevertheless the RES producers suffered the damages for the duration of its effect.

We trust that the legal rights of RES producers will be successfully preserved and damages will be duly recovered considering the attempts for establishing a new court practice as described by Penkov, Markov and Partners.