Press reaction

Polish energy giant sues former directors and insurer over failed coal power plant investment

1 February 2024

Shareholders approve Polish power company’s damages claim against former management in legal first

The management of Polish energy giant Enea are suing the company’s former directors and its insurers for lack of due diligence over a coal power plant investment that lost the company more than PLN 650 million ($160 million). The company is seeking this as damages from former management and supervisory board members who had voted in favour of the investment, and from its insurers under its directors’ and officers’ (D&O) liability insurance.

87% of shareholders voting in an extraordinary general meeting approved the company’s filing of the lawsuit.

ClientEarth lawyer Marcin Stoczkiewicz said: “This case is a notable first and underlines board directors’ potential liability for ongoing fossil fuel investments in a rapidly shifting economic, policy and regulatory landscape. It is also highly relevant to directors’ and officers’ insurers, named as defendants in the company’s damages claim.”

independent economic analysts warned from the outset that the plant would be unprofitable, in light of rising carbon prices, competition from cheaper renewables, the impact of EU energy reforms and difficulties securing financing.

ClientEarth had sent legal letters to Enea’s board members in 2018, arguing the investment would breach board members’ fiduciary duties of due diligence and destroy shareholder value. But the company and its joint venture partner Energa pressed ahead with the project.

ClientEarth took legal action against the project in 2018 and won the case in 2019. The companies abandoned the project mid-construction in 2020 and the PLN 1 billion investment was ultimately written off.

In 2021, Poland’s Supreme Audit Office reported improper risk management by Enea and recommended action against its former board members. The company subsequently obtained legal advice finding former directors who voted in favour of the investment had “failed to exercise due diligence in the context of the Company’s affairs or supervision” and were liable to the company as a result.

Stoczkiewicz said: “The lawsuit alleges what ClientEarth alleged in 2018 – that the directors’ decision to proceed with the investment represented a breach of board members’ duties of due diligence. We said that the decision to pursue the investment was “indefensible” – and clearly, current management agrees.

“We will be watching keenly to see how the judge deals with the question of directors’ due diligence obligations in the context of clear climate-related risks: rising carbon prices, competition from renewables, tightening energy policy and financiers’ withdrawal from coal. Companies and financial institutions should be watching too. Fossil fuel litigation risk is not theoretical – and directors are being held accountable.”


Notes to editors:


September 2018 –

  • Resolution to build Ostrołęka C coal plant adopted at AGM (as a joint project between energy companies Enea and Energa)
  • ClientEarth puts the directors of joint project partners Energa and Enea on notice of legal action

October 2018 –

ClientEarth lawyer Peter Barnett said: “This plant is a stranded asset in the making. The economic analysis is clear and there is widespread market concern about the plant.

“Companies and their directors are legally responsible for managing the financial risks and opportunities posed by climate change. Enea appears to be turning a blind eye to the well-documented risks threatening this project.

“Shareholders cannot sit back as companies gamble their funds on expensive, outdated and polluting technologies – climate litigation is only going to pick up the pace for companies that cling to fossil fuels.”

  • Investor Legal & General Investment Management raised major concerns over the project. Head of Sustainability and Responsible Investment Meryam Omi said: “This project doesn’t stack up…It’s a really worrying case for us that doesn’t make financial sense – we are very much in the dark about the future.” The article says that LGIM said further investigation was needed to check “if the companies, controlled by the government, are acting in the interests of all shareholders.”

December 2018

August 2019 –

Poznan court rules that the resolution allowing the plant to go ahead was invalid. This ruling does not officially prevent the company continuing with the build, but sends a major signal. The companies' share prices jumped several percentage points after the ruling.

ClientEarth lawyer Peter Barnett said: “This is an excellent result for Enea’s shareholders and for the climate. The plant is a stranded asset in the making, facing clear and well-documented financial risks.

“Companies and their directors are legally responsible for managing climate-related risks and face potential liability if they fail to do so. Enea and Energa should lay this project to rest before it incurs any further costs to the companies and their shareholders.”

February 2020 –

Enea and Energa suspend funding to and construction of Ostrołęka C.

ClientEarth’s Head of Central and Eastern Europe Marcin Stoczkiewicz said: “It was clear from the start that this plant was a stranded asset in the making and would destroy value for shareholders. This was the basis of our court action.”

May 2020 –

Enea and Energa announce total write-down (PLN 1 billion) of Ostrołęka C, wiping around 0.5 billion PLN off each company’s profits.

ClientEarth litigator Peter Barnett said: “This underlines that stranded asset risk is not a theoretical concern. This project was never viable, whether from a financial or a climate perspective, as its sponsors were repeatedly warned. Investors are fleeing coal and Ostrołęka C is just the latest example of wasted shareholder funds that could have been invested in cleaner, lower cost renewables.

“Companies and their directors are legally accountable to shareholders – and that means factoring in the financial risks and opportunities of the transition to a zero carbon economy. Clean technology, climate policy and climate litigation are becoming ever greater drivers of value and large-scale fossil fuel investment is increasingly fraught with financial and legal risk.”

2021 –

December 2023 –

Enea files case against the former members of the company’s management board and supervisory board (those who voted in favour of the project), and against the D&O insurer. The company is pursuing claims of PLN 656,165,462.

January 2024 –

Shareholders approve case (ex-post) at Extraordinary General Meeting.

ClientEarth briefings

September 2018: Ostrołęka C: Energa’s and Enea’s Board Members’ Fiduciary Duties to the Companies and Shareholders

December 2018: Ostrołęka C: The €1.2bn white elephant in the room at COP24

December 2019: Ostrołęka C: Enea’s and Energa’s Board Members’ Fiduciary Duties to the Companies and Shareholders (follow-up)

About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.