Enea v. Former Board Members and D&O Insurers

In December 2023, Polish state-controlled energy company Enea filed a civil lawsuit against former board members and its directors and officers (D&O) liability insurers, seeking over PLN 656 million in damages over the failed Ostrołęka C coal-fired power plant project. The suit alleges that former board and supervisory board members breached their fiduciary duties by approving the high-risk coal investment in 2018, despite financial and climate-related warnings. Enea’s decision to pursue the claim followed a 2021 audit by Poland’s Supreme Audit Office, which found failures in the company’s risk management and recommended accountability for the project’s losses. Shareholders formally approved the lawsuit in January 2024 with 87% support at an extraordinary general meeting. The project had faced early opposition from minority shareholder ClientEarth, which initiated legal action in 2018 alleging the investment breached directors’ duties of due diligence. A 2019 court decision ruled the AGM resolution approving the plant invalid. The plant was eventually abandoned mid-construction in 2020, and Enea wrote off nearly PLN 1 billion. The current lawsuit seeks to establish civil liability of both the individuals responsible for the decision and the insurers who provided cover under D&O policies. Legal commentators note that the case indirectly addresses directors’ duties in the context of climate-related financial risks, such as rising carbon prices, EU energy reforms, financing constraints, and competition from renewables. This is one of the first climate-related damages actions against corporate board members in Poland and may have significant implications for corporate governance, fiduciary duty, and insurer liability in the context of the low-carbon transition.