The ruling was issued in a dispute finally won by Electromontaj S.A., one of Romania’s leading energy construction companies, against a well-known energy supplier (intermediary), in which Electromontaj was represented by Zamfirescu Racoți Vasile & Partners (ZRVP).

A final decision rendered in a dispute concerning the termination of an electricity supply contract sets an important precedent for companies active in the energy market and for all parties involved in supply contracts. The Cluj Court of Appeal, in a ruling that became final after The High Court of Cassation and Justice dismissed the appeal, held that a supplier may not unilaterally modify the contractual price and may not suspend energy deliveries on the grounds that the agreed-upon price is no longer advantageous in light of market developments.

The dispute stems from the 2021 energy crisis, when rapidly rising prices prompted numerous suppliers to attempt to renegotiate existing contracts. In this case, the supplier repeatedly requested an increase in the contractually agreed price and, in the absence of the customer’s consent, unilaterally suspended the supply of electricity.

After nearly five years of litigation and a new round of proceedings ordered by The High Court of Cassation and Justice, The Cluj Court of Appeal fully upheld the appeal filed by Electromontaj and ordered the supplier to compensate for the damages caused by the interruption of deliveries, representing the full price difference incurred by Electromontaj for the purchase of replacement energy for the remaining term of the contract, plus the full amount of legal costs incurred at all stages of the proceedings. The ruling was subsequently upheld by the Supreme Court on appeal.

What the Ruling Clarifies

Beyond the ruling in this specific case, the decision establishes several important principles regarding the performance of energy supply contracts, namely the limits within which a supplier may invoke changes in market conditions to avoid fulfilling its obligations.

“The 2021 energy crisis gave rise to numerous situations in which suppliers attempted to unilaterally renegotiate contracts or ceased deliveries when the contractual price was no longer advantageous. The ruling affirms a fundamental principle: a supplier may not unilaterally decide that the contractual price is no longer favorable and cease fulfilling its obligations.

The supplier is obligated to bring the matter before a court, as the court is the only body capable of determining whether a contractual imbalance has occurred. This is an important affirmation of the principle of the binding nature of contracts, even during periods of market volatility,” stated Ovidiu Șerban, Partner at Zamfirescu Racoți Vasile & Partners.

The court also determined the extent of the supplier’s liability for breach of contract.

“With this ruling, the Supreme Court also held that the supplier is obligated to pay the client’s damages in full, covering both actual damages and lost profits, even if the client was forced to purchase energy on the spot market, at significantly higher prices,” added Celestino Dincă, Senior Associate at Zamfirescu Racoți Vasile & Partners.

The ZRVP team that represented Electromontaj S.A. in this dispute was led by Ovidiu Șerban, Partner, and Celestino Dincă, Senior Associate.

About Zamfirescu Racoţi Vasile & Partners

Zamfirescu Racoţi Vasile & Partners (ZRVP) is recognized as one of the leading law firms in Romania, providing legal assistance services in the areas of litigation and arbitration, as well as business law, insolvency, criminal law and tax consultancy.

ZRVP has a team of 75 lawyers, including 18 partners: Călin-Andrei Zamfirescu, Ioana Racoţi and Stan Tîrnoveanu (founding partners), Cosmin Vasile (managing partner), Anca Danilescu (senior partner), Elena Iacob, Alina Tugearu, Monica Strîmbei, Cătălin Micu, Andrei Dumitrescu, Mihai Băjenaru, Cosmin Cojocaru, Marina Crenguța Florea, Ovidiu Șerban, Violeta Saranciuc, Alexandru Iorgulescu and Dragoș Zamfir (partners), and Robert Oancea (of counsel).