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Siemens demands court force Russian company to return gas turbines delivered to Crimea

December 05, 2017, 14:32 UTC+3 MOSCOW

Siemens does not present civil rights violation claims in the lawsuit, but requires compliance with the EU sanctions by returning already supplied equipment

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MOSCOW, December 5. /TASS/. Siemens asked a court to return the gas turbines sold to Technopromexport and subsequently delivered to Crimea to Siemens Gas Turbines Technologies, a Siemens representative said in court.

"Proceeding from the invalidity of these transactions, we ask the court to oblige the actual purchaser of the equipment - Technopromexport - to return these gas turbine units to their original seller Siemens Gas Turbines Technologies," the company’s representative said.

Technopromexport representative, in turn, noted that Siemens requirements are illegal and unacceptable, and the attempt of the German concern to oblige the Russian legal entity to comply with the EU sanctions on the territory of Russia undermines the sovereignty of the country. "During the course of the dispute, Siemens is trying to ensure that Russian companies, Russian courts, on Russian soil comply with the sanctions requirements of a foreign international organization - the European Union. This is a direct attempt to damage the sovereignty of the state," the company’s representative stressed.

According to a Technopromexport representative, Siemens does not present civil rights violation claims in the lawsuit, but requires compliance with the EU sanctions by returning already supplied equipment.

Siemens believes that the structures of Rostec - LLC and JSC Technopromexport deliberately deceived the German concern by supplying gas turbines bought from the subsidiary company Siemens Gas Turbines Technologies to Crimea, and not to the Taman peninsula.

"We believe that in early 2015, when the EU sanctions were introduced, which do not allow the deliveries of equipment for the power plants to the Crimean Peninsula, Technopromexport decided to deceive Siemens Gas Turbines Technologies and Siemens AG itself. Under the pretext of implementing the project on the Taman Peninsula, it purchased the equipment for use in Crimea. We believe that in this case, these were deliberate actions aimed specifically at deceiving Siemens Gas Turbines Technologies," the company’s representative said.

According to him, conditions that rule out violations of the EU sanctions were included in the contract with Technopromexport, however Rostec’s structure believes that under the contract on the delivery of four gas turbines, it had no obligation to comply with the EU sanctions in Russia.

A Technopromexport representative reiterated that a contract for supplying turbines had been concluded between two Russian legal entities, and so Russian legislation is applied to it.

Turbines for Crimean thermal power plants

Technopromexport, a Russian company, is constructing two gas thermal power plants with a capacity of 470 MW in Sevastopol and Simferopol in Crimea. The plants will be commissioned on June 18, 2018.

In July 2017, a scandal broke out over the supply of turbines for those TPPs.

According to plans, the turbines produced under Siemens technology would be installed at the plants but at the end of 2016, but the German company halted deliveries because of the EU sanctions.

Reuters reported in July, citing sources, that Russia, despite sanctions, supplied the Siemens turbines to Crimea. The German corporation later confirmed that all four gas turbine units for the Crimean thermal power plants turned out to be manufactured by Siemens and were supplied to the peninsula bypassing the EU sanctions. After that, Siemens filed a lawsuit against Technopromexport’s representatives.

In its turn, Rostec said that Technopromexport had purchased four sets of gas turbine units "on the secondary market" and the manufacturer of the equipment was not specified.

Legal battle

Currently, the Arbitration Court of Moscow is reviewing two lawsuits against Rostec structures. The first lawsuit was filed by the German company, Siemens (the meeting on it was postponed until December 14), the plaintiff in the second case is a joint venture between Siemens and Power Machines - Siemens Gas Turbines Technologies (postponed until December 11).

The concern is disputing two contracts. The first one is on the supply of gas turbine units, concluded in March 2015 between Siemens Gas Turbines Technologies and Technopromexport OJSC. The second is on the resale of these turbines LLC Technopromexport (the contract was concluded in October 2016). In addition, Siemens intends to get this equipment back. Similar requirements are contained in Siemens Gas Turbines Technologies lawsuit to Rostec enterprises.

LLC and JSC Technopromexport filed a counterclaim against Siemens and Siemens Gas Turbines Technologies. Head of Rostec Sergey Chemezov said earlier that he believed that the dispute between Technopromexport and the German concern for supplying turbines to Crimea is possible only in court. Chemezov believes that Siemens has little or no chances in the case, since the contract is already being carried out.

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