Romanian entrepreneurs win lawsuit against Romania over withdrawn tax incentives

Romanian entrepreneurs Ioan and Viorel Micula, owners of European Drinks group, have won the lawsuit against the Romanian state in the Court of Washington and should receive total compensations of some USD 250 million, according to local business daily Zf.ro. The trial was opened in 2005 at the International Center for Settlement of Investment Disputes (ICSID) against the Romanian state’s decision to cancel a series of tax incentives granted to European Drinks for investments in disadvantaged areas. Romanian Ioan Nicula said that the compensations to be paid following the lawsuit won against Romania represent a tenth of the EUR 2.2 billion investments made in Romania since the 90s. “It was a long process because Romania delayed this measure, but in the end it was decided. (…) We’ve paid over EUR 1.2 billion to the state. The state didn’t give us back everything it took, we had to get much more because we had some tax incentives, we invested in disadvantaged areas. We haven’t yet managed to recover our EUR 2.2 billion investment,” said Ioan Nicula, quoted by Zf.ro. In the last years of arbitration, Viorel Micula was represented by Shearman & Sterling and local firm Dragne & Asociatii, while the other claimants were represented by King & Spalding. Romania was represented by Freshfields Bruckhaus Deringer and local firm Nestor Nestor Diculescu Kingston Petersen. This is the first trial the Romanian state loses at ICSID. Irina Popescu, irina.popescu@romania-insider.com