Czech-KHNP Dukovany contract signed after court lifts injunction

Wednesday, 4 June 2025

Czech Prime Minister Petr Fiala, writing on Facebook, said: "The contract for the completion of Dukovany has just been signed. One of the largest projects in the modern history of the Czech Republic aims to ensure the energy security and self-sufficiency of the Czech Republic - for today’s and future generations.

He said Czech companies will take about 60% of the construction work, with contracts already signed for about 30%. "The new units will produce electricity for a price of under 90 euros per megawatt hour – cheaper than similar projects in Poland or the UK. Today we have taken a step that will strengthen the Czech Republic for decades to come."

What did the supreme court say?

The supreme court (Nejvyšší správní soud) explained its decision in a press release saying: "The Supreme Administrative Court granted the cassation appeals of the companies Elektrárna Dukovany II and Korea Hydro & Nuclear Power (KHNP), annulled the contested resolution ordering a preliminary injunction and returned the case to the regional court for further proceedings."

It said it found the preliminary injunction, secured by EDF in the regional court last month, "both unlawful and partly unreviewable". It said the decision to issue a preliminary injunction meant weighing "whether the public interest in the performance of the public contract outweighs the interest of the party to the proceedings in preventing such performance".

The regional court "considered the public interest in the timely conclusion of the contract to be comparable with the interest in preventing the harm threatened to the plaintiff and with the interest in the possibility of a full review of the contracting authority's (and the Office for Competition) actions".

But the supreme court "considered the public interest in the timely conclusion of the contract and the commencement of the performance of the contract to be significantly more important".

It also said: "When assessing the interests, the court must first consider how likely it is that the action will be successful" and on this point the Supreme Administrative Court "reached the opposite conclusion to the regional court".

It also noted that the regional court "did not take into account the interests of KHNP at all. Therefore, it was also appropriate to cancel the preliminary injunction".

"By annulling the preliminary injunction with today's judgment, the court lifted the ban on concluding a contract for the performance of a public contract for the construction of a new nuclear power plant in the Dukovany location between the contracting authority (the company Elektrárna Dukovany II) and the selected supplier," the court's announcement concluded.

The substance of the case has yet to be heard in court - the regional court had issued its preliminary injunction until the case had been heard in full on the basis of the "serious harm that the plaintiff (EDF) is threatened with ... if the contract were concluded the French bidder would irretrievably lose the opportunity to obtain the public contract, even if the court ruled in its favour in the lawsuit". The regional court will hold a hearing on EDF's complaint against the tender on 25 June.

The background

The Czech Republic is planning new nuclear capacity and in July last year announced KHNP was the preferred bidder, ahead of EDF. The KHNP bid was said to be for around CZK200 billion (USD8.6 billion) per unit, if two were contracted. EDF brought a case to the Czech competition authority challenging the tender process, which was dismissed in April. That cleared the way for the planned signing of the official contracts with KHNP on 7 May. However EDF succeeded in securing a last-minute court injunction in a Czech regional court on 6 May to stop the contract being signed until its case relating to the tender process has been heard in court. In response the project development company Elektrárna Dukovany II and KHNP both appealed to the Czech Supreme Administrative Court to get the injunction lifted.

The French company EDF's objections to the tender process include the belief that the KHNP offer price and the inclusion of a guarantee that the construction would not be delayed or become more expensive, would be "unfeasible without illegal state aid given the prices in the nuclear industry". EDF says that if their rival bidder had state support it would breach European Union rules. As well as the court action in the Czech Republic, the European Union is conducting a preliminary review "to assess whether potential foreign financial contributions received by the Party (KHNP) constitute foreign subsidies and, if so, whether those foreign subsidies distort the internal market with respect to the project".

KHNP rejects that case and said it "welcomes the decision of the Czech Supreme Administrative Court to dismiss the injunction that sought to block the contract signature between EDU II and KHNP for the Czech new nuclear power plant project".

"This decision reaffirms the integrity and transparency of the Czech Republic’s tender process and clears the way for the timely advancement of this strategically important project. KHNP remains fully committed to working closely with the project owner, Czech government, and our Czech partners to deliver the new nuclear power plant which will contribute to the Czech Republic’s energy security and decarbonisation goals. KHNP looks forward to beginning the next chapter of our long-term cooperation with the Czech industry."

The Dukovany II Power Plant (EDU II) project company said earlier this month that the tender for the supplier of the new nuclear units "was carried out in all phases in a fully transparent manner and under fair conditions". The Czech government says that according to the "expert opinion of the Ministry of Industry and Trade, the EPC contract with the company KHNP was not subject to the Regulation on Foreign Subsidies. This was due to both the nature of the contract itself and the fact that the tender procedure had been initiated before the effective date of this Regulation".

Nuclear power in the Czech Republic

The Czech Republic currently gets about one-third of its electricity from the four VVER-440 units at Dukovany, which began operating between 1985 and 1987, and the two VVER-1000 units in operation at Temelín, which came into operation in 2000 and 2002.