MOSCOW, February 12 Russian company Power machine», which has been under American sanctions since 2018, won a dispute against the Vietnamese company Vietnam Oil and Gas Group (PetroVietnam) and recovered more than $500 million from it, the RBC newspaper reports.
The Power Machines company began arbitration proceedings in Singapore in 2019 in order to compensate for the funds spent on the joint project. At the end of 2013, the joint venture of Silmash and PetroVietnam received a contract for the construction of the Long Phu-1 thermal power plant in Vietnam. The contract value was estimated at $1.2 billion. After Power Machines came under American sanctions, the project was suspended due to the blocking of mutual settlements. They tried to solve the problem at the level of the Russian-Vietnamese intergovernmental commission.
At the beginning of 2019, Power Machines suspended its participation in the contract due to force majeure. The Vietnamese side, in turn, did not agree to recognize American sanctions as a basis for force majeure. PetroVietnam explained that blocking the project due to US sanctions caused damage to both sides.
“The Power Machines company of Alexey Mordashov, which has been under US sanctions since 2018, has achieved a positive decision in the claim against the Vietnamese state corporation Vietnam Oil and Gas Group (PetroVietnam) in the Singapore International Arbitration Center (SIAC)… Power Machines’ claim has been satisfied amounting to more than $500 million,” a source familiar with the arbitration process told the newspaper.
This information was confirmed to the publication by the company itself.
It is noted that this amount included the actual costs of construction of the project, including unpaid invoices, the cost of equipment and work that were ordered and completed by the date of termination of the contract.
The Vietnamese side, in turn, filed a counterclaim demanding the return of about 3.5 billion dollars. Then the company referred to various damages, including a demand to compensate for the cost of building the station along with interest for four years on the entire amount of the claims, but the arbitration court rejected it.
According to the publication, this is the first public victory of a Russian company under sanctions in international arbitration “at least since 2022,” when the West imposed tough sanctions against Russia after the start of a special operation in Ukraine.
Power Machines is a power engineering company, part of Severgroup LLC. The list of the company's main products includes solutions for thermal, nuclear, hydropower, power grids, industry and transport. The company's key competence is the implementation of complex turnkey projects in the electric power industry.