Russia’s Deripaska files lawsuit against Montenegro over lost aluminium investment

Russian Tycoon Deripaska is looking around for hundreds of millions of euros from the state of Montenegro, as he has been striving for compensation for a lost investment in a failing aluminium plant.

Deripaska's Central European Aluminium Company (CEAC) acquired 58.7 % stake in 2005 in the Balkan country's sole aluminium plant, Kombinat Aluminijuma Podgorica (KAP).

After the financial crisis in 2008, the government withdrew half of that debt for equity deal and kept the plant buoyed up with heavy subsidies. As demanded by the European Union, which Montenegro aims to join to cut subsidies thrusting plant to bankruptcy which finally leads to closing down.

According to CEAC, Deripaska had served a Notice of Arbitration against the state of Montenegro claiming “unlawful expropriation of his investment and related treaty breaches by the state".

CEAC further explained that Deripaska had repeatedly tried to negotiate a deal with the government to revive production."The state's sustained hostility towards him and its declared intention to renationalise the companies rendered cooperation impossible," it said.

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According to Reuters, the Montenegrin economy ministry dismissed the allegations, calling them "unreasonable". In 2013, CEAC prosecuted against Montenegro for the failure of the plant, but the International Court of Arbitration in Paris rejected the claims. Other claims in other courts are still ongoing.

Montenegro's Adriatic coastline has seen a great inrush of Russian money, homebuyers and tourists since the country split from Serbia in 2006. But its relation with Moscow was disturbed giving Montenegrin government a pursuit of closer integration with the West, mainly after it was invited to join NATO in 2015.

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