Czech antitrust authority halts South Korean nuclear deal amid patent disputes

The Czech antitrust authority (ÚOHS) has hit pause on a €16bn contract to build a pair of nuclear reactors, previously awarded to a South Korean consortium earlier in the year.

"I can confirm that in the past days based on filings of companies EDF and Westinghouse, ÚOHS issued precautionary measures which forbade the sponsor to close contracts in the tender on the construction of a new nuclear source," ÚOHS spokesperson Martin Švanda was quoted as saying by Czech Television (ČT) on October 30. 

This precautionary measure follows appeals lodged by the US's Westinghouse and France's Electricité de France (EDF), who claim that the project infringes on their reactor design patents. While the decision temporarily halts the deal,  officials point out that it does not indicate any outcome regarding the underlying disputes,  Yonhap reported.

"Issuing of precautionary measure does not indicate anything about what decision will be made in [said] matter," Švanda said.  

The winning consortium, led by Korea Hydro & Nuclear Power (KHNP), was aiming to finalise the contract for the Dukovany nuclear project by March. The ČEZ Group, the majority-state-owned power company overseeing the project, expressed confidence that it had adhered to all relevant laws during the selection process of the preferred bidder.

An official from South Korea's industry ministry described the antitrust authority's action as a "standard procedure" in response to competitor objections, predicting a minimal impact on the finalisation of the contract.

"In such cases, it is common that the office resorts to issuing a precautionary measure," ČEZ spokesperson Ladislav Kříž told Czech ČT, pointing to "more than 120" cases from last year when the ÚOHS made similar steps. ČEZ expects the contract to still be signed by March 31 and continues with negotiations with the South Korean side, the Czech Press Agency reported. 

Czech Minister of Industry and Trade Lukáš Vlček (STAN party) admitted to journalists ahead of the October 30 cabinet meeting that the situation is "a complication", adding that "I do not understand it as a major issue that would be unsurpassable".

This development comes in the wake of South Korean President Yoon Suk Yeol's strong commitment to support KHNP in securing the deal. During a recent ceremony marking the completion of nuclear units Shin-Hanul 1 and 2 and the groundbreaking for units 3 and 4, President Yoon highlighted the importance of the Czech project as a potential springboard for expanding South Korea's nuclear export opportunities. The deal, valued at approximately KRW24 trillion (about $17.3bn), would represent South Korea's second nuclear power plant export, following its successful venture in the United Arab Emirates in 2009.

Yoon's visit to the Czech Republic last month underscored his administration's dedication to bolstering international collaboration on nuclear initiatives. Following the visit, KHNP signed a memorandum of understanding with a Czech hydrogen association, aiming to explore synergies in clean hydrogen initiatives.

As the situation unfolds, the South Korean consortium remains optimistic about overcoming the legal hurdles posed by the patent disputes. The ongoing deliberations signal a pivotal moment for both South Korea's nuclear ambitions and the Czech Republic's energy landscape.