Montenegro’s Commercial Court is expected by the end of November to rule on whether Triangle and Plava hydro power (PHP) are entitled to damages over a mini hydropower project that was not built on the Đurička River. The companies are seeking around 22.5 million euros from the state, with the decision set to determine whether they receive compensation for costs and lost profits.
The companies, co-owned by U.S. businessman of Kosovo origin Florin Krasnići, say the claim includes almost 944,000 euros for actual losses and 21.5 million euros for lost profits. The first-instance proceedings have lasted six years.
The investors argue that the state failed to provide the conditions needed to carry out the project and did not respond adequately when local residents prevented work from starting. The state rejects their account, saying the law does not provide for damages to a concessionaire when a concession contract is terminated.
At the final hearing, the state asked the court to dismiss the lawsuit as unfounded, arguing that the companies had not proved a breach of contract or a causal link between state conduct and the damage claimed.
Investors and municipality give evidence
Krasnići told the court he had pursued the project because residents and all political parties in Plav supported it. He said local attitudes changed after Mirsad Barjaktarević became president of the Municipality of Plav. When the investors tried to install an information board, residents called him a “thief”, and police did not protect them, according to his testimony.
Barjaktarević agreed to meet the investors only after the U.S. ambassador became involved, Krasnići said. At the meeting, Barjaktarević told him he opposed the project, according to Krasnići, who also testified that then-Prime Minister Duško Marković had said the investors would be compensated. He said he later learned from media reports that some mini hydropower projects, including his, had been halted.
Barjaktarević told the court that his position and those of representatives of the government at the time were shaped by residents’ views, which mattered to them because they were involved in politics.
Economic expert Srđan Pupovac assessed that the investors had put nearly 1.5 million euros into the two planned plants since 2014, including interest over the period covered by his assessment. He estimated that if the investment had gone ahead, the companies could have made 21.5 million euros in profit after 27 years of operation.
State disputes profit calculation
The state’s representative challenged the lost-profit calculation, which was based on a business plan, and disputed the findings of construction expert Sanja Radović. She argued that Radović had consulted only the claimants, and not the Protector of Property and Legal Interests, before preparing her opinion. The state’s representative also said Radović had addressed legal questions.
The state further argued that Radović had omitted a report on the hydrogeological analysis and the possible effects of construction on wells used to supply water to Plav. The claimants’ representatives objected that the state had raised the report late in the proceedings, saying it predated approval to begin the project and that all parties knew of it before the lawsuit was filed.
Judge Vladimir Bulatović rejected the state’s request to exclude Radović from the case. The court is expected to issue its ruling by the end of November.
