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Dispute over NPP Belene may drive Bulgarian company to bankruptcy

11:24 18/09/2012

MOSCOW, September 18 - RAPSI. Litigation with Russia in regard to the Belene project may lead to the bankruptcy of Bulgaria's National Electric Company (NEK). The Bulgarian government, however, was aware of this risk, a source in Russia's nuclear industry told RIA Novosti on Tuesday.

If NEK loses the case and is not able to pay its debts, Rosatom is prepared to accept its assets as a payment.

Atomstroyexport is a leading Russian engineering company and is a subsidiary of the Rosatom state corporation. It is involved in the construction of nuclear power facilities abroad. Atomstroyexport is currently building five nuclear power generating units abroad.

On September 11, Atomstroyexport stated that it had increased its claims to 1 billion euros against Bulgaria's National Electric Company (NEK) regarding the Belene Nuclear Power Plant project as part of the case considered by the International Chamber of Commerce's (ICC) International Court of Arbitration.

"The increase in the claim was the result of the fact that the project was prematurely terminated by the Bulgarian government. The terms of the agreement dated November 29, 2006 have expired, and NEK continues to refuse to compensate Atomstroyexport for its expenses and losses," Atomstroyexport said earlier.

As for NEK's possible bankruptcy following the litigation, the source said that the Bulgarian government knew in advance that things could go this way and could have taken steps to avoid this.

A tender for the plant's construction was announced in 2005. This was won by Atomstroyexport and an agreement on the plant's construction was signed on November 29, 2006. In 2007 the Russian design was found to comply with all the European technical requirements. On January 18, 2009 a contract on the plant's construction was signed. On March 28, 2012 the Bulgarian government announced that it was cancelling the project.

Atomstroyexport filed a lawsuit with the ICC International Court of Arbitration in Paris in July. The Russian company sought to recover 58 million euros in compensation. This was the first dispute between the parties.

An Atomstroyexport representative told RIA Novosti that the company was seeking compensation for the work that had so far been carried out. It had obtained credit to carry out the construction at Bulgaria's request, he said. In the end, the Bulgarian company announced that it would file a counterclaim against Atomstroyexport, without specifying its claims.

In early October, NEK filed a 61 million euro counterclaim against Atomstroyexport with the Arbitration Court of Geneva.

"Atomstroyexport owes NEK 61 million euros according to a contract dated November 28, 2007," the company said.

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Dispute over NPP Belene may drive Bulgarian company to bankruptcy

11:24 18/09/2012 Litigation with Russia in regard to the Belene project may lead to the bankruptcy of Bulgaria's National Electric Company (NEK).
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