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PRESS RELEASE: Deripaska's CEAC flouts the orders of multiple arbitral tribunals

Published on: Jul 25, 2018 • 6:24 PM Author: Ministry of Economy
CEAC Holdings Limited, a company ultimately held by Oleg Deripaska, persists in its refusal to pay three separate costs and penalties orders in favour of the State of Montenegro in an amount in excess of EUR 1.5 million, and thus shows disregard for the tribunals that CEAC itself called upon to hear its claims.

CEAC and its owner Deripaska, who recently was placed under sanctions through the U.S. Office of Foreign Assets Control's "Specially Designated Nationals List", has failed in its claims against the State of Montenegro before multiple international arbitral tribunals.

Despite CEAC's repeated defamation of Montenegro in the global media, the independent and impartial tribunals comprised of renowned experts firmly put an end to CEAC's claims that it was wronged by the State in connection with the alleged investments in Kombinat aluminijuma Podgorica, Montenegro's only aluminium plant and onetime largest exporter.

First, in a publicly-available award of 26 July 2016, the International Centre for Settlement of Investment Disputes (ICSID) tribunal confirmed that CEAC had no right to initiate the costly and onerous arbitration and ordered CEAC to compensate Montenegro for approximately EUR 900,000 in costs.

CEAC's request to annul the award was met with a unanimous rejection by the committee constituted to hear CEAC's annulment case, in a publicly available decision of 1 May 2018. Again, Montenegro was awarded compensation for its costs in excess of EUR 300,000.

CEAC was also unsuccessful in its separate UNCITRAL arbitration (under the rules of the United Nations Commission on International Trade Law), this time for alleged breaches of a settlement agreement it had concluded with Montenegro in 2009.

The tribunal's 12 January 2017 award established – on the merits of the claims – that CEAC had no case against Montenegro. Moreover, the tribunal found that, in fact, it had been Mr. Deripaska's CEAC that routinely breached the agreement with Montenegro. The tribunal awarded over EUR 300,000 to Montenegro in contractual penalties.

To date, even after multiple invitations to comply with the tribunals' orders, CEAC simply refuses to pay costs and penalties orders in favour of the State of Montenegro. 

The same approach has also been taken by En+ Management Limited, a BVI company and a member of the same group of companies as CEAC. En+ Management guaranteed CEAC's payment of the EUR 900,000 ICSID award, prompting Montenegro to defer enforcement against CEAC while the annulment proceeding was underway. Now that the annulment phase is completed and CEAC remains bound to pay Montenegro's costs, both CEAC and En+ Management refuse to meet their end of the bargain.

Montenegro, however, will not stand idly by in the face of such tactics, but will pursue vigorously all legal remedies available to it, insisting that Mr. Deripaska's CEAC fully comply with its payment obligations under the tribunals' relevant awards to date.

PR OFFICE, MINISTRY OF ECONOMY 
GOVERNMENT OF MONTENEGRO

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