19 MARCH 2014AlCircle.com
Montenegro Sued by CEAC over KAP loss
Edited by : AL CIRCLE
2 min read
On Tuesday, CEAC filed a request to Vienna court for the arbitration proceedings with Montenegrin government to look for compensation over 600 mn euro for the losses that KAP aluminum plant faced after bankruptcy.
KAP aluminium plant’s biggest creditors are Montenegrin government and Oleg Deripaska, the Russian billionaire, through CEAC.
CEAC claims that interference was made by the Montenegrin government during investment process and this has resulted in major damages to the plant and subsequent investment loss.
CEAC has also accused the government of breach of an agreement signed between Cyprus & Montenegro on mutual encouragement & protection of investment.
On Tuesday the government has rejected the claims saying the demands against them were unfounded and even crticised Cyprus for its problems.
"Owing to poor corporate management, KAP's debt to its creditors exceeded 350 million," the government said.
CEAC had also tried to settle the disputes against Montenegro in 2013 August.
The company said the Montenegrin government did not respond to their notice on reaching a negotiated solution within six months, "so we had no other option but to initiate arbitration proceedings".
In early 2013 CEAC had filed for arbitration seeking 100 million euro in their compensation. They have blamed the government for the breach of an agreement about KAP that was signed between the company & Montenegro in the year 2010. As a result KAP went bankrupt as a result.
Montenegro has guaranteed 135 million euro and this is why KAP took loans from the bank to overcome the crisis that started in late 2008.
KAP aluminium plant’s biggest creditors are Montenegrin government and Oleg Deripaska, the Russian billionaire, through CEAC.
CEAC claims that interference was made by the Montenegrin government during investment process and this has resulted in major damages to the plant and subsequent investment loss.
CEAC has also accused the government of breach of an agreement signed between Cyprus & Montenegro on mutual encouragement & protection of investment.
On Tuesday the government has rejected the claims saying the demands against them were unfounded and even crticised Cyprus for its problems.
"Owing to poor corporate management, KAP's debt to its creditors exceeded 350 million," the government said.
CEAC had also tried to settle the disputes against Montenegro in 2013 August.
The company said the Montenegrin government did not respond to their notice on reaching a negotiated solution within six months, "so we had no other option but to initiate arbitration proceedings".
In early 2013 CEAC had filed for arbitration seeking 100 million euro in their compensation. They have blamed the government for the breach of an agreement about KAP that was signed between the company & Montenegro in the year 2010. As a result KAP went bankrupt as a result.
Montenegro has guaranteed 135 million euro and this is why KAP took loans from the bank to overcome the crisis that started in late 2008.
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