Currency converter
All news
News Search Topics
Use filter
You can filter your feed,
by choosing only interesting

Deripaska’s suit against Montenegro falls under investment protection pact — CEAC

December 08, 2016, 19:35 UTC+3 BELGRADE

The daily Vedomosti quoted an En+ official as saying Deripaska had lodged another lawsuit, citing the investment protection agreement between Montenegro and Russia of 1995

1 pages in this article
Oleg Deripaska

Oleg Deripaska

© Mikhail Metzel/TASS

BELGRADE, December 8. /TASS/. The lawsuit filed by the Cyprus-registered En+ company (an affiliate of Oleg Deripaska’s Central European Aluminum Company, CEAC) against the government of Montenegro is subject to the operation of the mutual investment protection agreement between Cyprus and Montenegro, a CEAC spokesman has told TASS.

"The arbitration tribunal at the International Center for Settlement of Investment Disputes has not yet considered the CEAC lawsuit against the government of Montenegro on the merits. It merely ruled that the CEAC does not fall under the agreement on the mutual protection of investments between Cyprus and Yugoslavia-Montenegro, so the tribunal is not in the position to look into the matter. The CEAC has now demanded this decision should be overturned. We are absolutely certain we are right. The way we see it, if the lawsuits are considered on the merits, our demands may well be sustained," he said.

Legal demands

The daily Vedomosti on Thursday quoted an En+ official as saying Deripaska had lodged another lawsuit on his own behalf, as a Russian citizen, citing the investment protection agreement between Montenegro and Russia of 1995. The lawsuit’s value is yet to be calculated.

The daily recalls that the dispute revolves around the Kombinat Aluminijuma Podgorica (KAP) aluminum smelter and the bauxite enterprise Niksic Bauxite Mine, which the En+ acquired in 2005. The Cyprus-registered CEAC was created especially to run these assets and also an alumina combine in Romania.

Vedomosti says the KAP, one of Montenegro’s largest industrial enterprises as well as a financially-embattled one, was in dire need for investors. Montenegro’s government spent a while looking for potential foreign investors. The CEAC, the daily says, at a certain point said it wished to close down the enterprise altogether. The Montenegrin government objected. The parties then agreed to come to terms over a scenario of restructuring on the CEAC terms. In 2013, though, the KAP was recognized bankrupt at the initiative of Montenegro’s government and sold a short while later for 29 million euros.

The CEAC took Montenegro to court. The first lawsuit was filed at the international court of arbitration in Vienna. The CEAC argues that Montenegro had defaulted on its obligations to supply electricity to the KAP, the daily says. It wants to have about 100 million euros in compensation, the En+ spokesman said, adding that the company was hopeful a decision might follow by the end of the year.

Another CEAC lawsuit went for consideration before the International Center for Settlement of Investment Disputes (ICSID). The CEAC argues Montenegro breached its own investment protection agreement with Cyprus by expropriating a Cyprus-registered asset. The ICSID refused to consider the case. Deripaska has now filed a similar grievance on his behalf.

Montenegro government’s stance

Oleg Deripaska’s En+ Group once lost a case against Montenegro, the Montenegrin government’s press-service recalls.

"The international tribunal turned down a suit the KAP’s former majority shareholder brought against Montenegro," a TASS correspondent was told when asked for a comment on Deripaska’s complaint, who wants a compensation from Montenegro for the embezzlement of his investment.

"As for En+ President Oleg Deripaska’s statement to the effect he has initiated arbitration proceedings against Montenegro as a private person, the Economics Ministry recalls that the En+ Group’s daughter company, CEAC, already lost a case vs Montenegro at the international Tribunal of the International Center for Settlement of Investment Disputes in Paris last July," the Montenegrin government’s press-service said.

"In any case the government of Montenegro will be able to prove once again that it was acting in accordance with the settlement agreement, the applicable legislation and the best international practices. We expect that the international tribunal will once again reaffirm any legal claims against Montenegro are groundless," the statement runs. "As before, the Economics Ministry will refrain from comment regarding the ongoing legal procedures.".

Show more
In other media
Partner News