Arnold & Porter Secures Victory for Republic of Bulgaria in USD $1.1 Billion Investment Arbitration

Arnold & Porter achieved a victory for the Republic of Bulgaria in a long-running investment arbitration initiated by ČEZ, a.s., a Czech energy utility. In an award dated January 29, 2026, the Tribunal at the World Bank-affiliated International Centre for Settlement of Investment Disputes (ICSID) dismissed on merit all of ČEZ’s claims. The claimant had been seeking damages of EU €967 million (approximately USD $1.1 billion) plus interest, making this the largest-ever investment arbitration claim brought against Bulgaria.

The dispute stemmed from three separate investments that the claimant had made in the Bulgarian electricity sector: a major electricity distribution and supply business; a thermal coal power plant, TPP Varna; and a biomass power plant. The claimant alleged that, through various regulatory and judicial decisions, Bulgaria breached its obligations under the Energy Charter Treaty and adversely affected the claimant’s investments. The Tribunal rejected in full all of ČEZ’s claims.

This is the second consecutive victory Arnold & Porter has secured on behalf of Bulgaria in investment arbitration proceedings. In 2019, the firm obtained a complete dismissal of all claims, as well as an award of all legal costs, in an arbitration filed by the State General Reserve Fund of the Sultanate of Oman.

The recent victory also represents the 60th positive result obtained by Arnold & Porter on behalf of sovereign States in investment arbitrations, out of the last 64 final awards and decisions in such arbitrations.

The Arnold & Porter team was led by partner David Reed and included senior counsel Paolo Di Rosa, partner Sally Pei, senior associates Bart Wasiak, Eliseo Puig, and Pieter de Gannon, and associates Youlia Racheva, Peter Saban, and Dianne Lake.