Czech court blocks signing of $18 billion nuclear plant deal with KHNP

By Jan Lopatka

PRAGUE (Reuters) -A Czech court has blocked electricity firm CEZ from signing a contract worth at least $18 billion with South Korea's KHNP to build a new nuclear power plant until the court has handled a complaint from the losing bidder, France's EDF.

EDF filed a complaint against Czech competition regulator UOHS last week after UOHS rejected its appeal over a tender to pick a supplier for two nuclear reactors - the biggest public procurement in Czech history and a key part of the country's energy strategy to replace coal and ageing nuclear units.

The Czech government, which has a majority stake in CEZ, had scheduled a contract signing with KHNP for Wednesday.

"If the contract were concluded, the French bidder would inadvertently lose the possibility of winning the public contract, even if the court rules in its favour in litigation," the Brno Regional Court said in a statement.

The decision can be appealed at the Supreme Administrative Court, it said. CEZ said it was likely to file an appeal.

Last year, CEZ picked KHNP to build two 1,000-megawatt units to expand its Dukovany nuclear plant, giving KHNP its first project in Europe. EDF has since sought to overturn the decision on multiple fronts.

Last week, the government agreed to take an 80% stake in CEZ subsidiary EDU II, which was set up to build the new units, to ease the financial burden on CEZ, boosting CEZ shares.

Prime Minister Petr Fiala said he hoped the court would rule quickly on the case, saying on X that the process was fair.

UOHS said it stood by its decisions which threw out EDF's complaint.

"This is a procedural decision. It does not indicate how the court will rule in the merit of the case," an UOHS spokesperson said. "We believe our decisions were correct."

The government ran the tender under a national security exemption, which suspends some standard procurement requirements.

CEZ and the government have said KHNP's offer beat EDF's in the vast majority of criteria.

EDF said it welcomed the decision "which provides the necessary time for a thorough assessment of any potential infringement of its rights," and added it was also pursuing the case at the European Commission.

CEZ said it would seek damages if courts ruled in favour of its selection.

KHNP also reserved the right to take its own legal steps. "The attempt to challenge the result through legal manoeuvres is regrettable and represents a direct attack on the principles of fair competition," it said.

(Reporting by Jan Lopatka and Jason Hovet. Additonal reporting by Forrect Crellin in Paris and Joyce Lee in Seouland. Editing by Emelia Sithole-Matarise and Mark Potter)