Eurohold Bulgaria AD (Eurohold) and Euroins Insurance Group AD (EIG) have officially filed an Arbitration Request against the Romanian Government at the International Centre for Settlement of Investment Disputes (ICSID) in Washington DC.
The amount in dispute exceeds 500 million euros, announced the former Euroins shareholders on Thursday.
According to a statement by Eurohold, the dispute was announced Wednesday evening on the Sofia Stock Exchange.
Eurohold and EIG have initiated the arbitration procedure due to the Romanian state's failure to fulfill its obligations under the bilateral investment treaty between Bulgaria and Romania, including its obligation to provide fair and equitable treatment to companies. EIG was one of the largest investors in the Romanian insurance market, investing around 280 million euros.
"Eurohold and EIG are seeking justice and compensation for the multiple illegal actions of the Romanian authorities that have harmed EIG's business in Romania and completely destroyed the Euroins Romania company, affecting the entire insurance market in Romania, with significant negative effects for policyholders and beneficiaries," the statement said.
On March 17, 2023, the Financial Supervisory Authority (ASF) unjustly revoked Euroins Romania's license, the company claims. As previously stated by Eurohold, the regulatory authority's decision was "arbitrary and discriminatory, practically constituting an illegal expropriation of Euroins Romania through a blatant violation of EU and international law."
The illegal decision by the ASF led to the bankruptcy of the Romanian insurer in June 2023, destroying the company's operations, formerly a leader in the local insurance sector, the statement further indicates.
On October 25, 2023, Eurohold and EIG sent a Notice of Dispute to the Romanian Government, requesting an amicable resolution of the dispute related to the Euroins Romania case, without waiving the group's right to initiate arbitration proceedings. The Romanian Government did not pursue this option.
"As we have already informed all interested parties, we will protect our investments through all legal means. The Romanian state has chosen not to address the issues we have raised. Furthermore, it has not even attempted to discuss this matter with us.
In addition, the Romanian authorities have completely disregarded our constructive proposals for resolving the dispute and minimizing the damages and costs imposed on Romanian citizens by the ASF's illegal revocation of Euroins Romania's license. Therefore, the next logical step is to proceed with the arbitration process," stated Todor Danailov, CEO of EIG.
Eurohold Bulgaria AD is a leading energy and financial group operating in Central, Eastern, and Southeastern Europe. It is listed on the Bulgarian and Warsaw Stock Exchanges. Eurohold owns Electrohold, a leading energy group in Bulgaria and the owner of the country's largest electricity distributor, supplier, and trader, with 3,000 employees serving over 3 million consumers. Eurohold also owns Euroins Insurance Group AD (EIG), a leading insurance group in the region, operating in 11 countries.