En+ Group Limited and CEAC Holdings Limited v The State of Montenegro; Fund for Development of Montenegro (Fond za Razvoj Crne Gore); Republic Fund for Pension and Disability Insurance (Republički Fond za Penzijsko i Invalidsko Osiguranje); Bureau for Employment of Montenegro (Zavod za Zapošljavanje Crne Gore); Kombinat Aluminijuma Podgorica A.D. - Final Award - 12 January 2017
Country
Year
2017
Summary
In the Matter of an Arbitration under the UNCITRAL Rules
Arbitral Tribunal:
Juan Fernández-Armesto (Presiding Arbitrator)
Prof. Dr. Rolf Trittmann (Arbitrator)
Dr. Stefan Rützel (Arbitrator)
STRUCTURE OF THIS FINAL AWARD
1. This Final Award comprises ten parts. Part I presents the persons and institutions involved in this arbitration, the arbitration agreements, the substantive and procedural laws applicable, and a summary of the proceedings. Part II provides a general overview of the dispute, describing its main actors, the contracts at stake, and the factual background. Part III reproduces the Parties' prayers for relief. Part IV presents, as a preliminary but central issue, the facts and legal effects regarding KAP's Failure of Restructuring and the subsequent liability of each Party. Part V and Part VI address and resolve the merits of CEAC's claims and Respondents' counterclaims, respectively. Part VII determines the interest to be applied to the amounts awarded. Part VIII establishes the costs of this arbitration. Part IX offers a summary of the Tribunal's decisions on each claim and counterclaim. Finally, Part X sets forth the Arbitral Tribunal's final decision.
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SUMMARY OF THE DISPUTE
64. This dispute arises from the alleged breach of a Settlement Agreement ["Settlement Agreement"] signed by the State of Montenegro and three of its agencies, on the one hand, and En+ and its subsidiary CEAC, on the other. The settlement terminated an ongoing arbitration between the parties concerning CEAC's purchase of a majority shareholding in KAP, an aluminum smelter formerly owned by the State and its agencies. In addition to settling all claims, the agreement created new rights and duties on the signatories, meant to achieve the financial recovery of KAP. Notwithstanding these commitments, a few years later KAP went bankrupt. CEAC has now brought this arbitration asserting that Montenegro breached its main duties under the Settlement Agreement. In turn, Montenegro seeks to exact contractual penalties for CEAC's and En+'s alleged breaches of some provisions of the Settlement Agreement.
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X. DECISION
965. For the foregoing reasons, the Arbitral Tribunal unanimously decides as follows:
1. Orders CEAC to pay the State of Montenegro an amount of € 259,000, as contractual penalties under Clauses 20.1(a) and 22.2(a) of the Settlement Agreement, plus interest thereon accruing at the Default Interest Rate from September 30, 2015 until payment.
2. Orders CEAC to pay the State of Montenegro an amount of € 29,000, as contractual penalties under Clauses 19.1(a) and 22.2(b) of the Settlement Agreement, plus interest thereon accruing at the Default Interest Rate from September 30, 2015 until payment.
3. Refers to its findings at para. 610 of this Award, as regards CEAC's claim that the State of Montenegro failed to pay electricity subsidies in an amount of € 8,720,000 pursuant to Clause 11 of the Settlement Agreement.
4. Orders that each Party bear its own Legal Costs, and that all other costs incurred in this arbitration be split by half between the Parties and be paid with the amounts deposited with the PCA, any unexpended balance to be returned to the Parties.
5. Dismisses all other claims and counterclaims.
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