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Rosatom, the Russian nuclear company, has sued Finnish companies for $2.8 billion in relation to a nuclear plant contract

Rosatom, a Russian company, has filed a suit in Moscow against Finland’s Fortum and Outokumpu. The lawsuit demands 227,8 billion roubles (2.8 billion dollars) as compensation for losses resulting from the termination of the contract for the Hanhikivi-1 Nuclear Power Plant in Finland.

The dispute between Rosatom and the former Finnish partners over the cancelled contract dates back to May 2022. This was when the Finnish partner terminated the contract shortly after the conflict in Ukraine 2022 began. They cited significant delays, risks of political nature, and doubts regarding the feasibility of the project.

Rosatom, which announced its intention to seek compensation on Monday, said it was seeking compensation "for losses caused by the unlawful termination" of the EPC contract for the construction of a nuclear power plant as well as "violations of shareholder agreements, fuel supply contracts and the refusal of repayment of the loan".

Outokumpu has stated that it was not a party to any agreement, whether EPC or otherwise, with Rosatom in relation to the Hanhikivi-1 Project.

The contract for the 1.2 gigawatt power plant, with estimated investments of 6.5-7 billion euro, was signed with Fennovoima in 2013. This joint consortium included Outokumpu and Fortum, as well as SSAB, who initially controlled two thirds via a joint venture. And the Russian side had one third.

Fennovoima ceased its entire operation after the project was terminated and now only engages in the legal dispute.

Outokumpu stated in a press release that "this is a complex international contract matter and Moscow is not an appropriate venue for addressing the related disputes."

Outokumpu, Fortum and Fortum all said that they have not received an official notification from Rosatom regarding this new claim.

Fennovoima had sought the return of over 1.7 billion euro in advance payments. Rosatom has filed counterclaims totaling 3 billion euros. Arbitration is being conducted in international courts.

Fortum stated that the matter is in arbitration proceedings at the International Chamber of Commerce. The court ruled in February against Rosatom's subsidiary's request for Fortum to be a party in this proceeding.

Fortum stated in an email that "the arbitral tribunal's ruling on this matter is definitive."

Fortum, a major investor in Russia's Energy Sector, lost its Russian assets in 2023 when Russia took control of seven thermal power plants and a joint venture portfolio of wind and Solar Plants under a presidential decree. (Reporting and writing by Anastasiyalyrchikova in Helsinki, Gleb Stolyarov and David Evans and Louise Heavens).

(source: Reuters)