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16 Dec, 2022 05:52

Rosatom to seek damages from Finland over broken nuclear deal

Independent experts have declared Helsinki's one-sided termination of the Hanhikivi nuclear project contract illegal, the Russian company says
Rosatom to seek damages from Finland over broken nuclear deal

Russia’s Rosatom has the right to claim compensation from Finland over the breach of the Hanhikivi nuclear power plant deal, a board of independent experts has found, according to the Russian company. Earlier this year, Finnish company Fennovoima unilaterally rescinded its contract for the construction of the power plant with Rosatom’s subsidiary RAOS Project.

Rosatom said both Fenovoima and RAOS Project applied to a Dispute Review Board (DRB) to investigate the situation. DRB consists of independent international experts and the option to review disputes via this council was included in the Hanhikivi contract. The procedure of the review is defined by the rules of the International Chamber of Commerce.

Rosatom said the board ruled that the one-sided termination of the deal constituted a material breach of its terms, which gives the Russian company the right to demand compensation from Fennovoima. The exact amount of the compensation will be determined later, Rosatom added.

The contract for the construction of the Hanhikivi-1 nuclear power station was signed back in 2013. The plant was to be built on Finland’s Hanhikivi peninsula, with the total cost of the project estimated at €7-7.5 billion ($7.5-8 billion). The project was postponed several times, with both sides blaming each other for the delays. In May this year, Fennovoima terminated the contract, saying that Russia’s military operation in Ukraine further exacerbated the risks to the project’s successful implementation.

Rosatom said it saw no reason for this, as the Russian side was fulfilling all of its obligations and the project “was demonstrating significant progress.” The company stressed it would demand a return of the funds it had spent on the project.

In August, the Finnish company initiated arbitration proceedings against Rosatom, demanding a return of about €2 billion in advance payment that it had made to the RAOS Project. A spokesman for Rosatom said at the time that the Russian company had already filed six lawsuits for a total of $3 billion against Fennovoima. Fennovoima CEO Joachim Specht recently said that the proceedings could drag on for several years.

For more stories on economy & finance visit RT's business section

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