Russian tycoon Oleg Deripaska will sue Montenegro for hundreds of millions of euros over the bankruptcy of aluminium smelter Kombinat Aluminijuma Podgorica (KAP) and bauxite mining company Rudnici Boksita, his company CEAC Holding said in a press release on December 7.
Deripaska objects to Montenegro’s decision to declare the two companies insolvent, claiming that this move was a result of sustained hostility against him. So far, Deripaska has filed numerous claims against Montenegro via CEAC Holding and En+ Group, which owns CEAC Holding. However, this is the first time the Russian tycoon will sue the country directly.
“… Mr Oleg Deripaska has, in his personal capacity, served a Notice of Arbitration against the state of Montenegro, claiming unlawful expropriation of his investment and related treaty breaches by the state of Montenegro. Mr Deripaska will be seeking redress in the hundreds of millions of euros,” the statement said.
En+ Group acquired majority stakes in KAP and Rudnici Boksita back in 2005. However, in 2013 the government initiated bankruptcy proceedings due to unpaid debts. Eventually, both KAP and Rudnici Boksita were acquired by Montenegrin private firm Uniprom owned by local businessman Veselin Pejovic. CEAC Holding and En+ Group have objected the sale of KAP to Uniprom as well.
Deripaska also claims that Montenegro denied his investment fair and equitable treatment, in violation of international law and Montenegro’s treaty obligations.
“Mr Deripaska is seeking arbitration against Montenegro under the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL), bringing his claims under the bilateral investment treaty executed between the Russian Federation and the Federal Republic of Yugoslavia in 1995. The place of arbitration is yet to be determined,” the press release reads.
The Russian businessman was once one of the closest allies of Russian President Vladimir Putin, but when he went into financial meltdown in 2008 and asked the Kremlin for billions of dollars in bailout loans, he lost the president’s support. Deripaska has since lost his position as one of Russia’s top 10 richest men and has fallen out of the top 200 richest people in the world, according to a Bloomberg survey, but he is still worth $3.1bn.
Deripaska has already filed numerous claims against Montenegro with several courts. In November, CEAC Holding asked for the annulment of the International Centre for Settlement of Investment Disputes (ICSID) ruling after it lost a case against Montenegro over KAP’s bankruptcy through the centre.