Ever since the Czech government pushed through a retroactive 26 percent tax on solar companies’ profits at the end of 2010 to stem an ongoing solar power boom the threat of a massive law suit has loomed large. Now, 11 foreign investors, all members of the International Photovoltaic Investors Club (IPVIC), have told the Ministry of Finance that within six to eight weeks they will file a lawsuit against the Czech state.

Platforma pro OZE, a local association championing the rights of renewables power companies, says proceedings started by the European Commission are a lot wider than just taking the Czech Republic to task over its failure to push through legislation on time. Brussels is also looking into the ongoing refusal to connect wind and solar plants because it could threaten the electricity grid, it says.

The main architect of the Czech state’s legal defense strategy in the looming solar arbitration battle — which, if lost, could cost taxpayers hundreds of billions of crowns — has shown Czech Position a few of the cards in his tightly held hand. Radek Šnábl, an adviser to Finance Minister Miroslav Kalousek (TOP 09), is looking to assemble a “dream team” of expert arbitration lawyers from the four corners of the Earth. And talk of a financial settlement is nonsense.

The special auditing section of the Finance Ministry is investigating how two massive wind farms were built by Czech state-controlled power giant ČEZ in the north of the country. The probe reportedly centers on the company Amun.Re, which acted as a middle man in the construction after ČEZ bought the ready prepared projects, according to business daily Hospodářske noviny. ČEZ said the construction costs were reasonable.