On 1 November 2016 the Amsterdam Court of Appeal rendered its judgments with regard to the unbundling cases of the two (last) Dutch integrated energy companies: Eneco and Delta. These cases were referred back to the Amsterdam Court of Appeal by the Supreme Court in 2015 to investigate the claim of Eneco and Delta that the two provisions in the Electricity Act and the Gas Act (hereinafter: the ‘Energy Acts’) were in violation of Article 1 of the First Protocol of the ECHR (the European Convention on Human Rights; hereinafter: ‘Article 1’) regarding the right to property.
The two energy companies argued that the group prohibition in the Energy Acts constitutes an interference with ‘the peaceful enjoyment of its possessions’. Parties refer to the broad interpretation of the definition of ‘possession’ by the European Court of Human Rights (ECHR). Shares held by the energy companies in the respective subsidiaries are also considered a ‘possession’.
Eneco v the State of the Netherlands
The Court concludes in the case of Eneco that upholding the group prohibition with regard to the energy company, does not constitute a violation of the right to property. According to the Court the group prohibition meets the Article 1 principle of lawfulness and (following that) the principle of a fair balance. In a first comment, Eneco could not say yet whether it will appeal this judgement (again) with the Supreme Court. If not, this will be the final decision for Eneco.
Delta v the State of the Netherlands
In the case of Delta, the Court concludes that the group prohibition meets the Article 1 principle of lawfulness (similar to the Eneco case). However, the question remains whether the principle of a fair balance is met as Delta has a controlling interest in companie that operates the nuclear power plant ‘Borssele’. The difference with the Eneco case is that the nuclear power plant cannot be sold to a random market party. As a result, Delta will de facto be forced to sell the network operations, leaving Delta with the loss-making commercial activities which will lead to the end of the company.
The Court therefore has doubts if upholding the group prohibition will put a disproportionate burden on Delta and whether Delta should be entitled to compensation for the expected damage.
The State is given the opportunity by interlocutory decision to react to this and any further decision will be stayed.
On 3 December 2015, the Dutch Energy regulator, ACM, already rendered an enforcement decision on Delta and Eneco to comply with the unbundling obligations (Eneco 31 January 2017 and Delta 30 June 2017).