State-owned Fortum alleges Danish wind-power firm Vestas failed to return advance payments for project canceled due to sanctions
Finland’s state-owned energy company Fortum Oyj has launched International Chamber of Commerce (ICC) arbitration proceedings against Danish wind-energy giant Vestas over the termination of contracts to deliver around 50 wind turbines to Russia.
According to the Finnish utility, “sizeable advance payments” had been made to Vestas for wind turbines before Ukraine-related sanctions were introduced against Russia by the European Union last year.
“Vestas did not deliver on its contractual obligations and yet refused to repay the advance payments and other project-related costs,” Fortum said in a statement earlier this week.
According to the Danish wind-power giant, the Finnish firm is seeking over €200 million ($218 million) in compensation for lost contracts, after anti-Russia sanctions prevented Vestas from delivering, installing, and servicing new turbines at four wind-power plants of Fortum’s Russian subsidiary WEDF.
WEDF is jointly owned by Fortum and Rusnano, a Russian state-owned nanotechnology corporation.
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“We strongly believe the arbitration to be without merit,” Vestas CEO Henrik Andersen said in a statement, adding that the EU members and businesses were “aware from the outset that the sanctions would have financial consequences.”
The Danish corporation cited “sanctions-specific” clauses in its contracts with Fortum’s Russian subsidiary, which allegedly give both parties the right to terminate contracts, adding that the clauses explicitly included sanctions against Russia.
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April 15, 2023 at 06:00PM