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Suez Environnement files claim at Vienna court for €32m in damages against Pecs local council

Issues

Paris-based water-treatment and waste-management company Suez Environnement has filed a claim at the Vienna International Arbitration Court as seeking €32.3m compensation from the city of Pecs (S Hungary) for revenue lost because the Pecs local council annulled its contract with 48.05%-Suez-owned Pecs Waterworks to manage the city’s water services in September 2009, Suez Environnement said in a press statement dated November 18.

The claim has already been registered at the Vienna International Arbitration Court and the City’s response is now awaited, Suez Environnement said.

The office of Pecs Mayor Zsolt Pava and the city local council’s legal advisor Ivan Szabo told MTI on Sunday that they welcome the initiation of proceedings at the independent, international court but added that they deemed the sum of 32.3m stipulated in GDF Suez’s claim to be "unfair and intentionally exaggerated."

Suez Environnement said that economic-consultation firm Compass Lexecon had calculated the amount of the damage claim.

After failing to reach an agreement with Suez regarding a repurchase of the company’s shares in Pecs Waterworks, the Pecs local council established the company Tettye Forrashaz Zrt in October 2009 to manage the city’s water services, stationing security guards at the local waterworks to prevent Pecs Waterwork’s management carrying out further duties.

The local council said it decided to terminate its contract with Pecs Waterworks because its services were too expensive and it placed priority on company expansion rather than a reduction in water fees.

In September 2011, Hungary’s Supreme Court upheld a lower-court ruling overturning the Hungarian Chamber of Commerce and Industry arbitration court’s earlier decision that the Pecs local council’s annulment of its contract with the Suez Environnement-owned company had been legal, ordering that new proceedings be held in the case.

The involved parties have initiated approximately 40 legal claims against one another.

The Pecs local council owned 50.05% of the city’s waterworks, while other local councils owned 1.9% of the utility before the termination of Pecs Waterwork’s contract.

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