Energia being sued for €3m in dispute over shares in company behind Dublin power plant project
Posted on 16th January 2023 at 21:11
Connective wants court to determine meaning of share purchase agreement entered into in May 2018
An energy company claims the Energia Group has failed to pay €3 million under a share purchase agreement related to the transfer of control of a company behind a plan to develop and operate an anaerobic digestion power plant in Dublin.
Connective Energy Holdings Ltd, of Glenmore Estate, Ballybofey, Co Donegal, is suing Energia Group ROI Holdings DAC in proceedings that were admitted to the Commercial Court on Monday. Energia did not object to the case entering the commercial list.
Connective wants the court to determine the meaning of a share purchase agreement entered into by the two firms in May 2018 or alternatively to order rectification of the agreement to reflect the actual bargain struck between the parties.
The agreement involved the sale of shares, and therefore transfer of control, of a company called CEHL Dublin Bioenergy Ltd from Connective to Viridian Power and Holdings DAC, which later became Energia. Those shares were originally bought by Connective from another company set up to develop the anaerobic power plant at Huntstown in west Dublin.
Connective says it transferred its shares on the basis that Energia would pay it €3.5 million, in two payments, the first being €500,000, which was paid. The second was to be €3 million once the project received certification on completion.
Connective says Energia subcontracted the development of the project. However, Connective says that on April 25th last year, four years after the share purchase agreement was made, Energia informed it the contract for the building of the plant had been terminated.
It remains incomplete and Energia now intends to sell the company without completing it, Connective says.
Energia claimed it was not bound to honour the agreement as a consequence of the termination of the contract, Connective says. It also claimed the €3 million payment was contingent on the success of the project and that Connective’s actions were designed to imperil the sale.
Karol McElhinney, a director of Connective, said in an affidavit that it appeared from Energia’s most recent accounts that it had invested €24 million in Huntstown and would now try to recover all or part of its investment.
Mr McElhinney said his firm was concerned that if the company was sold before the project was completed, and certified, Energia would seek to avoid payment of the €3 million.
He also said a review of the communications between Connective and Energia “discloses a clear agreement” that the €3 million would be paid “in all outcomes”.
On Monday, Mr Justice Denis McDonald admitted the case to the commercial list, approved directions for the progress of the case, and said it could come back in June.
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