When asked what news he is paying the most attention to, Zoltan Faludi, the Managing Partner of Wolf Theiss’s Budapest office and Chairman of the Energy Arbitration Court in Hungary, says, "I would have to point to my original profession: Energy."
Faludi reports that the Hungarian government is finally putting together a new licensing scheme for solar and wind projects, for which the industry has been waiting for many years. The last tender was cancelled suddenly in 2010, and since then nothing has happened.
Faludi describes the draft legislation — which is expected to be passed and come into force in the next few weeks — as operating on a "First Come/First Served" basis, with subsidies given to those companies that apply first "from the basket ... until the basket is empty." He describes the process as "strange stuff," and worries that it is designed to provide access to the subsidies to a favored group of individuals while excluding those foreign investors that need more time to review and familiarize themselves with the new regulatory environment. "That’s just a guess," he admits, conceding that "at this point you can’t say it’s all about politics." But when it’s suggested that he doesn’t sound impressed, Faludi laughs. "I’m not impressed, and I’m not surprised."
Faludi refers to the current EU talks about penalizing Hungary for its treatment of immigrants in conceding that the proposed energy licensing scheme is, by comparison, "a much smaller scale issue." Nonetheless, he says, "for the energy sector this is something new, because in the renewable sector in the past seven years nothing has happened — no new licenses, no new regulatory regime, and no new feed-in tariffs. So now, it’s a big step." He says, "I just hope that it’s done on an equal treatment basis and on a transparent basis. I hope that the process will be transparent and fair."
Otherwise, Faludi reports, business is good, and getting better. He reports a "positive trend" in M&A in Hungary, describing the deals coming in the door almost every day as "more and more and bigger and bigger." He also reports a real uptick in disputes and arbitrations handled by his team, though he says that’s probably a function of their own increased specialization and capacity rather than reflecting an increase in disputes across the market.
In “The Buzz” we interview experts on the legal industry living and working in Central and Eastern Europe to find out what’s happening in the region and what legislative/professional/cultural trends and developments they’re following closely.
