Finnish energy company sues Russia for damages
22 October 2024 20:25
Finnish energy concern Fortum has initiated legal proceedings against Russia’s Forward Energo to recover about €800 million for the illegal seizure of its assets by the Russian authorities. This was reported by "Komersant Ukrainian" with reference to the group’s website.
The company has filed a lawsuit in a civil court in the Netherlands against the Russian Forward Energo.
The case concerns intercompany loans worth about EUR 600 million granted to PJSC Fortum.
PJSC Forward Energy is in default on all intercompany loans. The majority of these loans have matured and have not been repaid. In addition, PJSC “Forward Energy” has not paid interest on all loans. The amount of the claim, including interest and penalties, is approximately EUR 800 million. The final amount will depend on the exchange rate between the ruble and the euro and the amount of interest to be paid.
The process is expected to take several years. According to the original loan agreements, disputes between the parties are to be resolved in Dutch courts and in accordance with Dutch law.
“The question is, if the decision is positive, how will the funds be received? In similar situations, we have seen that it can take 10 years or even more,” the Group’s chairman said in an interview with the Helsingin Sanomat newspaper.
What preceded it
on 11 May 2023, Fortum announced the complete loss of control over its €1.7 billion in Russian assets. The company decided to write off its Russian assets due to the fact that the shares of its subsidiary in Russia were taken under temporary management by Rosimuschestvo on the basis of a decree issued by Russian dictator Vladimir Putin.
At the time, the Russian leader’s press secretary Dmitry Peskov said that this initiative of the Russian president allegedly mirrored the attitude of Western governments towards the foreign assets of Russian companies. According to him, the main purpose of Putin’s decree was to create a “compensation fund” in response to the “illegal expropriation of Russian assets abroad”.
on 27 February 2024, Fortum launched arbitration proceedings against Russia demanding compensation for its assets. The company accused Moscow of breaching its obligations under bilateral investment treaties that Russia has concluded with the Netherlands and Sweden.
