EDF_REGISTRATION_DOCUMENT_2017

2.

RISK FACTORS AND CONTROL FRAMEWORK Legal proceedings and arbitration

appeal against the harshest judgments issued at first instance; ■ rely on the order from the European Court of Justice to argue that the harm ■ suffered by the producers is based on illegal orders and is therefore non-repairable. SUN’R On 21 June 2012, SUN’R filed a complaint against EDF and Enedis, along with an application for protective measures (mesures conservatoires), with France’s ADLC. SUN’R accused Enedis of delays in the procedure for the connection of its photovoltaic facilities and EDF of delays in the implementation of the mandatory purchase contracts and the payment of the related invoices. In addition, according to SUN’R, EDF ENR benefited from special treatment for the connection of its facilities by Enedis and the payment of its invoices by EDF. In a decision of 14 February 2013, the ADLC issued a decision rejecting all the applications for protective measures made by SUN’R but the proceedings on the merits are still ongoing. On 12 January 2018, ADLC’s investigation services sent to the parties a discharge proposal, concluding that there were no anti-competitive practices by EDF, Enedis and RTE. However, this proposal does not prejudice the final decision, which will be adopted by the ADLC. At the same time as its complaint before the ADLC in 2012, SUN’R filed on 29 August 2012 a petition at an urgent applications hearing for expert assessment and provisional damages before the Administrative Court in Paris including a claim for provisional compensation of €1 million for EDF and €2.5 million for Enedis. By order of 27 November 2012, the urgent applications judge (juge des référés) at the Administrative Court in Paris dismissed this petition. On 30 April 2015, SUN’R issued proceedings against Enedis and EDF SA before the Commercial Court in Paris seeking compensation for the loss allegedly caused to it by the delays in the procedure for the connection of its proposed solar energy plants to the electricity distribution network. It has asked the Court to stay the proceedings and claims, pending ADLC’s decision on the merits of the case, a provisional amount of €10 million to be applied against its loss. In a judgment issued on 7 November 2016, the Commercial Court in Paris dismissed SUN’R’s application for provisional damages and issued a stay of proceedings pending ADLC’s decision on the merits of the case. On 24 November 2015, Sun West, Azimut 56 and JB Solar started proceedings against Enedis and EDF SA before the Commercial Court in Paris on the same grounds. They are currently claiming almost €4 million to compensate their alleged loss but have asked the Court to stay the proceedings pending ADLC’s decision on the merits of the case. In a judgement dated 4 December 2017, the Paris Commercial Court dismissed the application by Sun West, Azimut 56 and JB Solar for provisional damages and issued a stay of proceedings pending ADLC’s decision on the merits of the case. Eole Miquelon On 20 July 2015, Eole Miquelon filed a complaint with ADLC on the practices implemented in the electricity industry in Miquelon. Eole Miquelon operates a wind farm on the island and claims that EDF has restricted the use of wind energy produced from its facilities in order to give preferential treatment to the electricity it produces directly. Eole Miquelon claims it will be forced to close its operations on the island because of these practices. Xélan On 17 October 2016, Xélan brought a claim before the French Competition authority (Autorité de la concurrence) alleging mainly that EDF’s refusal to share the consumption data of clients at regulated selling prices prevented Xélan from designing its own electricity supply offers based on energy consumption management. Following the filing of this claim, the Competition authority carried out on 22 and 23 November 2016 search and seizure operations at the premises of EDF and several of its affiliates. These operations do not in any way, however, prejudge the question as to whether there exists a violation that could be attributed to the EDF group. EDF and its subsidiaries filed appeals with the Court of Appeal of Versailles to challenge these search and seizure operations. The hearings concerning these claims took place on 22 February 2018 and a decision will be made during the first half of 2018.

Litigation by photovoltaic operators for compensation

On 13 May 2014, Solaire Direct issued proceedings against EDF, EDF EN, EDF ENR and EDF ENR Solaire before the Commercial Court in Paris seeking compensation for the damage it claims to have suffered as a result of the practices condemned by the ADLC in its decision issued on 17 December 2013, assessed by Solaire Direct at €8.7 million. On 16 December 2014, the Court ordered a stay of proceedings pending the judgment to be issued by the Court of Appeal in Paris on EDF’s appeal against the above-mentioned ADLC decision. In a judgement dated 21 February 2017, the Commercial Court ordered a new stay of proceedings until the ruling of the Court of Cassation on the appeal filed by the ADLC against the decision dated 21 May 2015. The Court of Cassation gave its ruling (see the “Solaire Direct” dispute above) and the case was re-entered on the case list and Solaire Direct estimates its damages at €5.2 million. No date for the hearing has currently been fixed. On 11 December 2014, Apem Énergie, Arkeos, Biosystem-AD, Cap Eco Énergie, Cap Sud, Isowatt, PCI-m, Photen and Sol’Air Confort started proceedings against EDF, EDF ENR and EDF ENR Solaire before the Commercial Court in Paris on the same grounds. They claim alleged damages of €18.3 million. By judgement dated 27 September 2017, the court rejected the action of the plaintiffs on the grounds of limitation of action by lapse of time. Only six of the eleven companies appealed the decision. Total damages and interest claimed now stand at €9.4 million. Photovoltaic producers litigation The announcement by the public authorities in autumn 2010 of an upcoming decrease in the photovoltaic electricity purchase prices triggered a massive increase in requests for connections (this rush being explained by the fact that the date on which a full application was submitted would then determine the applicable price). Several successive ministerial orders were then issued reducing purchase prices. As these reductions were not sufficient to stem the rush of applications for contracts, the government, by decree dated 9 December 2010, suspended the conclusion of new contracts for a period of three months and stated that if the financial and technical proposal for a request had not been approved before 2 December 2010, a new connection request would need to be submitted at the end of this three-month period. In this context, a certain number of producers, who had lost the entitlement to benefit from the mandatory purchase prices before the moratorium, brought legal proceedings for damages against EDF, as the distribution network manager (GRD) in non-interconnected island areas (ZNI) and Enedis GRD, as the network manager in Mainland France, on the grounds that the network managers had failed to issue technical and financial proposals for connection in a timely manner, which would have allowed them to enjoy the more attractive electricity purchase conditions (see section 2.4.2 “Legal proceedings concerning EDF’s subsidiaries and holdings”). Although some first instance courts dismissed all of their claims, others have awarded compensation to them. EDF and Enedis solicited the benefit of their Civil Liability insurance policy. Insurers refused to apply their guarantee. The Court of Cassation ruled in a decision dated 9 June 2015, (Green Yellow) that Enedis’ liability was to be covered by its insurers and that Enedis was liable. However, insurers keep refusing their guarantee for other pending cases. In addition, by order dated 15 March 2017, the European Court of Justice confirmed that the orders of 10 July 2006 and 12 January 2010 fixing the purchase prices of electricity of photovoltaic origin constituted “intervention by the State or through the resources of the State”, one of the four criteria for qualifying as state aid. It reiterated that such aid measures implemented without having been previously notified to the Commission are illegal. It is now for the national jurisdictions to implement the consequences of this, particularly by ruling out the application of these illegal orders. The commercial courts and courts of appeal will have to give a ruling in the forthcoming months. Disputing their liability, EDF and Enedis: decided to bring an insurance action to combine the claims related to a single ■ harmful event having the same technical cause (requests for connection issued between 24 and 31 August 2010), known as a serial claim against the insurers;

134

EDF I Reference Document 2017