Finland Failed to Get Financial Compensation From Russia for ‘Hanhikivi’ Project

The International Dispute Review Board (DRB) refused Finland to file financial claims to the Russian “Rosatom” company in the situation with the Hanhikivi-1 NPP, the contract for the construction of which Helsinki terminated this year. This was reported by the Director General of the Russian atomic state corporation Aleksey Likhachev.  

The Finnish company, “Fennovoima”, 34 per cent of which belonged to the Russian “Rosatom” company, announced at the beginning of May this year that it had terminated the contract with the Russian nuclear state corporation for the construction of the Hanhikivi-1 nuclear power plant in Finland.

The Hanhikivi-1 project provided for the construction of a single-unit NPP based on a modern Russian-designed VVER-1200 reactor of generation 3+, with a capacity of 1,200 MW. Fennovoima acted as the customer, owner, and operator of the future NPP. The general supplier of the Hanhikivi-1 NPP was RAOS Project (part of Rosatom). RAOS Project reported that it considers the termination of the contract unreasonable.

Some time later, it was reported that the DRB issued a verdict according to which the unilateral termination of the contract for the construction of the Hanhikivi-1 NPP by the Finnish “Fennovoima” was recognized as unlawful. DRB also declared illegal the refusal of “Fennovoima” to accept works performed by RAOS Project as a supplier under an EPC contract.

Rosatom also stressed that the unilateral decision of the Finnish shareholders of Fennovoima to terminate the contract came at a time when the project was progressing: at the beginning of the year, representatives of the company made public statements that the licensing process was at the finish line.

“The transfer of the license documentation to the Finnish regulator to assess the possibility of issuing a construction license was planned to be completed in the coming months. In parallel, work was actively carried out on the construction site to ensure readiness for the start of full-scale construction,” they specified in the Russian state corporation.

It was stated that the illegal termination of the contract is a material violation of the terms of the contract, which gives RAOS Project the right to claim damages from “Fennovoima”. In June, Rosatom CEO Likhachev said that the Finnish government’s rejection of the project with Russia is “absolutely vulnerable” in legal terms, so the Russian side has great chances to return the money spent in court and Rosatom will definitely use the right to demand compensation from Helsinki for the termination of the contract.

At the end of August, “Fennovoima” announced that it had filed a lawsuit against “Rosatom” for a total amount of less than 2 billion euros. In response, “Rosatom” said that at that time it had already filed six lawsuits for a total of 3 billion dollars.

“The customer has terminated the contract, the first wave of litigation has already passed. And the international arbitration, consisting of representatives of only Western European countries, issued an unambiguous verdict. Firstly, the Finnish side was denied financial claims. Secondly, an unequivocal decision was made that the contract was terminated illegitimately. This is the first and most important decision that we have been waiting for. And, already relying on it, we will further develop our relations with our Finnish customer, who, of course, made an absolutely politically motivated decision. Actually, they didn’t hide it. We cannot influence the worldview of Finnish bosses. But let them sell it for their own money, and return ours. Here is such a simple approach in this matter,” Likhachev concluded in an interview with the Izvestia newspaper.

Ru-Main, 26.12.2022
Source: RIA Novosti 

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