site.btaEurohold Insurer Threatens EUR 500 Mln Arbitration Claim in Bid to Defend Romania Investment

The Eurohold Bulgaria insurance company and its Euroins Insurance Group have officially notified the Romanian government of their intention to file an international arbitration claim worth at least EUR 500 million in a bid to defend their investment in Romania unless the dispute over Euroins Romania is resolved quickly and the group receives adequate compensation for losses, Eurohold reported on Thursday.

The notice of dispute to the government in Bucharest is the first official step in launching an international arbitration procedure as per an investment protection agreement between the two neighbouring countries' governments. "If we fail to reach an acceptable agreement within a reasonable timeframe, we will protect our investment through international arbitration," the group's CEO Todor Danailov warned.

Eurohold and the Euroins Group are taking these measures after a March 17 decision of Romania's Financial Supervisory Authority (ASF) to delicense Euroins Romania. The Bulgarians argue that ASF has committed many obvious violations of EU law, specifically the Solvency II regime adopted by all EU member states to provide a stable legislative framework and ensure coherent supervisory practices in the insurance sector across the EU, Eurohold said.

The company reiterated its opinion that the ASF decision is unwarranted and discriminatory and represents an instance of unlawful expropriation going blatantly against international law. The Romanian regulator's decision has led to a bankruptcy procedure against Euroins Romania, which has dealt a blow to the insurance group's business, Eurohold said.

Before going for a possible arbitration procedure, the sides to the investment dispute may try to find a solution through negotiations.

Euroins Romania is part of the Euroins Insurance Group (EIG), which is one of the largest insurance groups in the region and is owned by Eurohold Bulgaria. Eurohold Bulgaria is a leading energy and financial group operating in Central, Eastern and Southeastern Europe. It is listed on the Bulgarian and Warsaw stock exchanges. In a Bulgarian National Television interview in February 2023, Eurohold Bulgaria Supervisory Board Chair Asen Christov said that they are the largest holding company in terms of revenues and volumes in Bulgaria, and operate in 12 countries with a turnover of more than EUR 2.5 billion.