Finnish Company Files Rosatom for Contract It Terminated Itself

Finnish company Fennovoima filed a lawsuit against Russian Rosatom for almost 2 billion euros for the Hanhikivi-1 nuclear power plant (NPP) and said it was waiting for a counterclaim. The Russian state corporation said that lawsuits have already been filed, for $3 billion.   

Fennovoima is a nuclear power company established by Russian state’s nuclear company Rosatom and a consortium of Finnish state-owned power and industrial companies. Russia’s share in the project is 34%. The contract for the construction of the Hanhikivi-1 NPP was signed by Fennovoima and a subsidiary of Rosatom in December 2013. The plant was supposed to produce 40% of all the energy needed by the country, so in this scenario, Finland would be able to achieve carbon neutrality by 2035.

At first, it was expected to complete the licensing of the NPP in 2018, then it was postponed to 2019. As a result, full-scale work on the construction of future nuclear power plants has not begun. In early May, Fennovoima terminated its contract with Rosatom claiming that the step was made due to significant delays on the Russian part and “its inability to implement the project.” It was also stressed that the situation in Ukraine increased the risks for the delays in implementation of the project.

Finnish side demands compensations and expects counterclaim

The Head of Fennovoima, Joachim Specht, said in an interview with Helsingin Sanomat that the company filed a lawsuit against Rosatom for 2 billion euros. The newspaper reported that the amount of the claim includes an advance payment of 800 million euros and interest payments of 200 million euros. The official statement of Fennovoima says that the contractor RAOS Project (a subsidiary of Rosatom) is delaying work and is not able to implement the project. Fennovoima has also terminated the agreement with Rosatom subsidiary TVEL for delivery of nuclear fuel.

In turn, Rosatom reported that it has already filed 6 lawsuits totaling $3 billion against Fennovoima. The CEO of the state corporation, Alexey Likhachev, said in June that Rosatom has a great chance to return the money spent in court, as the information of the Finnish company “contradicts the facts” and the Finnish “daughter” of Rosatom has no choice but to protect its interests and demand compensation for the illegal termination of the project.

“It seems that Fennovoima decided to use a technique from the history of another Finnish nuclear project, namely Olkuluoto-3, when the Finnish customer TVO and the Franco-German contractor AREVA/Siemens exchanged counterclaims against each other. The customer won. But there was a clear fault of the contractor in the failure of all deadlines. The situation is different here, there are many complaints about the work of Fennovoima itself,” the Director of the autonomous NPO for the support of the development of atomic science, technology and education, Alexander Uvarov, said.

Rosatom expects to fully repay the costs of the Hanhikivi NPP project in Finland, the contract for which was terminated by the Finnish side. According to Likhachev, the corporation is ready to apply to international arbitration, Interfax reports.

“Only one project has been stopped – the Hanhikivi nuclear power plant in Finland. The situation is legally controversial, and we will appeal to international arbitration in order to fully refund the funds spent. There is a precedent – the Bulgarian Belene project, for stopping of which we received over 600 million euros by an international arbitration decision,” he reminded.

More and more ties are being cut between Helsinki and Moscow

As reminded, in April, the Finnish energy company Fingrid limited the import of electricity from Russia by a third from 1300 MW to 900 MW.

As the associate professor of the Electricity market research Group at the Lappeenranta-Lahti University of Technology (LUT), Jukka Lassila, noted in a comment to the Helsingin Sanomat newspaper, Helsinki’s decision is aimed at protecting against possible Russian influence in the process of Finland’s possible accession to NATO, the application to which was filed on May 18 by Sweden and Finland. On June 28, a memorandum was signed in Madrid allowing Stockholm and Helsinki to join the military bloc.

Ru-Main, 25.08.2022
Source: EADaily 

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