ClientEarth v. Enea - Other

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ClientEarth v. Enea - judgment

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ClientEarth v. Enea - press release

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ClientEarth v. Enea - decision

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ClientEarth, a non-profit environmental law organization and shareholder in the Polish utility Enea SA, has sued that company, seeking the annulment of a resolution consenting to construction of the €1.2bn 1GW Ostrołęka C coal-fired power plant. The claim is brought under the Polish Commercial Companies Code. The plaintiffs report that the lawsuit claims the consent resolution for construction of the power plant harms the economic interests of the company as a result of climate-related financial risks, including: rising carbon prices, increased competition from cheaper renewables, and the impact of EU energy reforms on state subsidies for coal power under the capacity market. On September 19, 2018, in advance of filing the pleadings, plaintiffs’ lawyers wrote to Enea stating that ClientEarth regarded “the proposed resolution, and the Management Board’s proposal of that resolution, as clearly and obviously harmful to the interests of Enea and its shareholders” and warned that Enea’s ongoing actions in relation to the plant “risk breaching board members’ fiduciary duties of due diligence and to act in the best interests of the company and its shareholders.” The claim was filed on October 24, 2018 in the Regional Court in Poznań (Sąd Okręgowy w Poznaniu). 

On August 1, 2019, the court found the company resolution authorizing construction of the power plant to be legally invalid. Further discussion of the reasoning will be added to this profile upon review of a translation of the full decision.

During the extraordinary general meeting of shareholders of the respondent company, resolution giving its directional consent to commence the construction phase of the  project of building coal-fired power station (1 GW) in Ostrołęka, Poland. 

In the opinion of the Poznań Regional Court, the contested resolution encroaches upon the powers of the company's management board to manage its affairs, exceeding, in this respect, the powers of the general meeting and, at the same time, constitutes a binding instruction for the management board to manage the company's affairs. With the facts thus established, the Regional Court firstly pointed out that, pursuant to Article 425 § 1 of the Commercial Companies Code (CCC) a resolution of the shareholders' meeting of a joint-stock company may be declared invalid if the resolution is contrary to the law. In the opinion of the Poznań Regional Court, the plaintiff's claims are justified, in particular as regards the contradiction of the appealed resolution with Article 368 § 1 of the CCC, Article 3751 of the CCC and Article 384 of the CCC. According to the principles of organisation and functioning of a joint-stock company, it operates through its organs, which are the management board, the supervisory board and the general meeting. Each of these bodies may act within the limits of its powers under the law and the articles of association. In particular, the statutory body appointed and authorised to manage the company's affairs and represent it externally is the board of directors. For these reasons, the Poznań Regional Court declared the resolution invalid.

The judgment in question was appealed to the Appellate Court in Poznań, 1st Civil Division and Intellectual Property Division, which dismissed the appeal by judgment of 8 July 2020.

Aspects strictly related to climate change were part of the arguments in the ClientEarth Foundation's claim, but they were not the warp of the judgment. The Regional Court in Poznań based its ruling solely on the formal aspects of the adoption of the resolution and the fact that the extraordinary general meeting of shareholders exceeded the powers granted to this body by the Commercial Companies Code.  As a result of the court's invalidation of this resolution, the investor abandoned the project to build a coal-fired power station in Ostrołęka. 

ClientEarth v. Enea

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

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Groups  of people who are adversely affected by climate change or the response to it

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Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

ClientEarth v. Enea - Other

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Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Finance