Dispute Review Board rules Fennovoima's decision to terminate contract to construct Hanhikivi-1 NPP unlawful
MOSCOW. Dec 15 (Interfax) - The Dispute Review Board (DRB) has confirmed in its ruling that it was unlawful for Finland's Fennovoima to terminate the contract to construct the Hanhikivi-1 nuclear power plant in Finland; and the company's subsequent refusal to accept the work completed by RAOS Project Oy, part of Rosatom state nuclear energy corporation, as the supplier under the EPC contract was also unlawful, Rosatom said in a statement published on its official Telegram channel.
The DRB is a not-for-profit organization that promotes resolving disputes through resolution and settlement. The contract between Fennovoima and RAOS Project Oy stipulates the DRB as the arbitrator in resolving and settling disputes, according to Rosatom Country, the state nuclear energy corporation's official publication.
The DRB also found that Fennovoima Oy's unlawful termination of the Hanhikivi-1 NPP project was in breach of the EPC contract, which gives RAOS Project Oy the right to claim damages from Fennovoima Oy. Damages will be determined in additional proceedings.
Rosatom intends to defend its interests until its demands are fully satisfied.
Russia's Rosatom state nuclear energy corporation intends to return the funds spent on the project of the Finnish Hanhikivi-1 nuclear power plant in addition to compensating for the value of shares it owns in the Finnish customer, Fennovoima, according to financial statements to International Financial Reporting Standards (IFRS) filed by the Rosatom Group's JSC Atomenergoprom. "As of the date of signing the financial report, the claims of the Group's companies totaling around 3 billion euros are under consideration by international arbitration," according to the report.
Fennovoima notified Russian partners on May 2 that it had terminated the contract to build the plant. Fennovoima CEO Joachim Specht said later in an interview with the Helsingin Sanomat media outlet that the company has initiated arbitration proceedings and was suing Rosatom for 2 billion euros. Of these, 800 million euros is an advance payment made by Fennovoima in favor of the RAOS Project, Specht said. Specht said Rosatom had warned Fennovoima of further project delays earlier this year, that there was a risk it would be delayed by several years. This was one of the reasons Finland had to terminate the Hanhikivi-1 project, he said.
Rosatom has said six lawsuits were filed.
The unilateral initiative of the Finnish shareholders to terminate the EPC contract came at a time when the project was demonstrating remarkable progress, Rosatom said on December 15. In early 2022, Fennovoima Oy representatives publicly announced the licensing work had reached the "homestretch" with the final licensing materials expected to be submitted to the Radiation and Nuclear Safety Authority (STUK) for assessment of the construction license application over the next couple of months, it said. Meanwhile, active preparatory work was under way at the NPP site to ensure readiness for the start of full-scale construction, it said.