Following the successful challenge, before the Bulgarian Constitutional Court, of the 20% cuts to the Feed-in Tariff (“FiT”) for PV and wind producers, renewable energy investors in Bulgaria are now entitled to claim back some of the FiT paid into the state budget after 10 August 2014 (the date Decision No 13 under Constitutional court case No 1 / 2014 entered into force).
Based on detailed evidence gathering and research by CMS, over 100 producers approached the Bulgarian Ministry of Finance in 2016 requesting an out-of-court settlement of the matter following the successful precedent established by the Bulgarian Transmission System Operator regarding the 2012-2013 FiT cuts. Upon receipt of the Ministry of Finance’s negative response, some tens of investors initiated civil court proceedings in an attempt to recover part of the 2014 FiT, which was wrongfully retained by the state budget.
While some of the civil courts agreed that they were competent to hear the dispute and that the recovery of the 2014 FiT cuts should be made on the grounds of unjust enrichment, others shared the Bulgarian Ministry of Finance’s view that the matter must be resolved by the administrative courts.
In Ruling No 634 dated 12 December 2017, the Bulgarian Court of Cassation, upon careful consideration of the arguments of the parties, held that the civil courts are competent to rule upon the recovery of the 2014 FiT cuts for PV and wind producers. The ruling, which is likely to be followed by the rest of the Bulgarian courts contains strong arguments in favour of the renewable energy producers. It suggests that “by the fact that the provisions of the law are repealed by a decision of the constitutional court, the receivables shall no longer be considered as public state ones and therefore the administrative courts shall not be competent to hear these cases. These proceedings shall be considered as unjust enrichment cases and competent to hear these shall be the civil courts of Bulgaria.”