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The Appeal Court of Iceland passes judgement in favor of Orkubú Vestfjarða

2. March, 2020

On the 21st of February, the Appeal Court of Iceland pronounced a judgement in a case plead by Jónas A. Aðalsteinsson, Attorney at LEX, on behalf of Orkubú Vestfjarða ohf. against the municipality of Ísafjarðarbær.

In the case, LEX’s client demanded that all rights to hydroelectric power in Úlfsá in Dagverðardalur be recognized as the property of Orkubú Vestfjarða, and that an agreement made between Ísafjarðarbær and AB-fasteignir ehf. regarding a license for exploration and utilization of hydroelectric power in Úlfsá, would be invalidated.

The claims were based on an agreement with Ísafjarðarbær from 1977 regarding the Orkubú’s predecessor’s takeover of the operations, assets and liabilities of Ísafjörður’s power grid. The agreement passed all rights to hydroelectric, geothermal and catchment power that Ísafjarðarbær or the power grid company owned or might later own in on the municipality´s lands or elsewhere. This was to apply equally to known and unknown rights.

Ísafjarðarbær demanded an acquittal, claiming that the endorsement generative of the above agreement was non-binding, invalid or voidable. The Appeal Court did not agree with these arguments and affirmed the district court’s ruling that all rights to the hydropower in Úlfsá in Dagverðardalur were the property of Orkubú Vestfjarða ohf.

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