INTERNATIONAL ARBITRATION TRIBUNAL RULES IN FAVOR OF ROSATOM IN DISPUTE WITH FINNISH COMPANY
The legal proceedings that began after Finland’s Fennovoima unilaterally terminated its contract with Russia’s State Atomic Energy Corporation Rosatom for the construction of the Hanhikivi-1 Nuclear Power Plant (NPP) have reached a decision.
The International Court of Arbitration under the International Chamber of Commerce (ICC) ruled that Finland’s termination of the contract was unlawful.
In a statement, Rosatom said that the long-running legal dispute between the Russian state nuclear corporation and Finnish company Fennovoima had been resolved in Rosatom’s favor. The statement noted: “The arbitration proceedings conducted under the rules of the International Chamber of Commerce not only established that Fennovoima’s decision was unlawful, but also confirmed that the project was actively progressing at the time the contract was terminated and that Rosatom companies had made progress toward obtaining the construction license for the NPP.”
The contract for the Hanhikivi-1 NPP, which was planned for construction in northern Finland, was signed between Fennovoima and Rosatom in 2013. The project envisaged the construction of a 1,200 MW power unit based on the latest Generation III+ reactor design.
The total investment in the project was expected to reach €7–7.5 billion, while the value of localization opportunities for companies in Finland and other European Union countries was projected at €1.8–2.7 billion. The plant was expected to supply approximately 10% of Finland’s total electricity demand.
However, in May 2022, Fennovoima terminated the contract, citing alleged delays by Rosatom in meeting the project schedule and a deterioration in the political situation.
In December 2022, the Dispute Review Board (DRB) rejected Finland’s financial claims against Rosatom in connection with the Hanhikivi-1 NPP project.
Alexey Likhachev, Director General of Rosatom, commented on the arbitration decision as follows:
“This is the second decision in Rosatom’s favor by respected European institutions. Four years ago, an international panel of experts within the Dispute Review Board also supported our position, finding Finland’s withdrawal from the project unjustified and the termination of the EPC contract unlawful.
“Today’s outcome is an important achievement, but it is not final. We will continue to defend our position regarding the project in Finland before courts and other authorities in different jurisdictions.
“Nevertheless, I would also like to point out that if we had continued working together to implement the project instead of dealing with legal proceedings, Finland would today have a nuclear power plant featuring the latest technology, along with affordable and environmentally friendly electricity.”
