Montenegrin officials may testify over bankrupt aluminium plant

Montenegrin officials may be called to testify in international courts over bankruptcy of aluminium plant Kombinat Aluminijuma Podgorica (KAP), RIA Novosti reported on Monday, citing a spokesperson for the Central European Aluminum Company (CEAC).

CEAC, a subsidiary of Oleg Deripaska’s En+, managed the plant until July 2013 when Montenegrin officials initiated a bankruptcy due to debt in excess of 350 million euros.

CEAC objected to the bankruptcy. The company launched arbitration proceedings in Vienna and turned to the International Centre for Settlement of Investment Disputes (ICSID) seeking some 900 million euros in damages.

CEAC is expecting a trial on the merits and a final ruling by the end of 2016.

The company claims that Montenegro broke the terms of an agreement on the Podgorica plant that was signed in 2009-2010 between CEAC, Montenegro and En+, which led to losses and the bankruptcy. Moreover, Deripaska’s company claims that Montenegro also broke an agreement on mutual encouragement and investment protection signed by Cyprus and the State Union of Serbia and Montenegro (dissolved in 2006).

“The total loss for CEAC from the Montenegrin government’s actions is estimated at 900 million euros. Additionally, CEAC filed some 60 lawsuits with Montenegrin courts demanding cancellation of the illegitimate expropriation of its property and further sales to the corporations affiliated with the government at a price below its market value,” a company representative said.