Linde seeking to stop Russian claim for recovery of $1.2 in favor of RusChemAlliance through Hong Kong courts

MOSCOW. April 28 (Interfax) - Linde wishes to go to court in Hong Kong to stop a Russian lawsuit to recover about $1.2 billion in favor of RusChemAlliance (a JV of Gazprom and RusGazDobycha, one of the operators for construction of the ethane gas processing complex in Ust-Luga) due to non-performance of the contract.

It was reported that RusChemAlliance and the consortium of Linde and Renaissance Heavy Industries signed an EPC contract in 2021 for the construction of a gas processing plant in the Leningrad Region. RHA transferred an advance payment to Linde, but the latter notified the customer in May 2022 that the work had been suspended due to EU sanctions.

"The execution of the contract was legally suspended by Linde Engineering on May 27, 2022, in accordance with the applicable sanctions and in accordance with the decision of the German sanctions authority," the company said in its Q1 reporting.

For its part, RusHimAlliance is confident that sanctions do not extend to the work under the contract to the point of suspending it completely (they can only affect some items of non-critical equipment for the gas processing plant), and is demanding that the work be resumed. "Because operations were never resumed, the claimant notified Linde on September 23, 2022 regarding the termination of the contract," the court said. The guarantor banks responded that they could not fulfill their obligations because a payment to the Russian company might violate European sanctions.