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26 Dec, 2022 14:07

Finland denied compensation over canceled Russian nuclear project – official

International arbitration panel called Helsinki’s unilateral withdrawal from the contract with Rosatom “illegal”
Finland denied compensation over canceled Russian nuclear project – official

The International Dispute Review Board (DRB) has refused to file financial claims against Rosatom, the head of the Russian state-owned nuclear major, Alexey Likhachyov, has said. Finland had earlier this year terminated a contract with the Russian company to build the Hanhikivi-1 nuclear facility in the country.

Likhachyov called Finland's decision to withdraw from the project political, adding that Hanhikivi-1 emerged as the only international venture “on which, so to speak, our foreign activities ‘lost weight’.”

In May, the Finnish Fennovoima consortium, in which Rosatom owns a 34% minority stake, terminated the contract with the Russian corporation to build a nuclear power plant in the cape of Hanhikivi in northwest Finland, citing delays and then increased risks resulting from the conflict in Ukraine.

In August each side initiated legal proceedings against the other, claiming billions of dollars in damages. At the time, Fennovoima said its claims totaled almost €‎2 billion ($2 billion), while Rosatom said it was seeking $3 billion from the Finnish consortium.

Earlier in December, after months of legal battles, the DRB, an arbitration panel that settles international contract disputes, ruled the Finnish termination of the contract to be illegal.

“This is the first and most important decision we have been waiting for,” Likhachyov told Russia’s Izvestia newspaper, commenting on the issue. He added that “we cannot influence the attitude of the Finnish bosses. But let them sell it for their own money, and ours will be returned.”

The head of Rosatom also noted that the first stage of legal proceedings has been completed and “an international arbitration consisting of representatives of only Western European countries has issued an unambiguous verdict. The Finnish side was denied financial claims,” Likhachyov said.

The Finnish company said on its website that the panel's recommendation was neither final nor binding and that the consortium had filed a notice of “dissatisfaction” with the DRB.

Fennovoima signed the contract for Hanhikivi-1 project with Rosatom's nuclear power plant exports subsidiary, Rusatom Overseas, in December 2013. The project implied the construction of a one-unit NPP based on the state-of-the-art Russian reactor VVER-1200, with the capacity of 1,200 MW.

The Hanhikivi project is majority (66%) owned by Fennovoima and shareholders, including the country’s major corporations and several local energy companies. It was at the stage of licensing and preparatory construction works when the contract was terminated.

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