TVEL, Rusatom Energy International and RAOS Projects Oy (all part of the Rosatom) have filed a lawsuit against the Finnish energy holding Fortum and the manufacturer Outokumpu for RUB227.8bn ($2.8bn). The claim relates to compensation for losses caused by the unlawful termination of the EPC contract for the construction of the Hanhikivi-1 NPP. The lawsuit also relates to violations of the shareholder agreement and the fuel contract, as well as the refusal to repay the loan.
Finland’s Fennovoima and Rusatom Overseas signed a contract for the construction of the Hanhikivi-1 NPP in late 2013. The plant was to be built in the north of Finland in Puhajoki. The project was estimated at €7-7.5bn ($7.9-8.5bn).
The Finnish side cancelled the project in May 2022, shortly after Russia’s invasion of Ukraine. Fennovoima, the company set up to build the plant, cited significant delays, increased geopolitical risks, and uncertainty over the feasibility of the project as reasons for the termination.
Fennovoima is majority-owned by Finnish stakeholders, including Fortum and steel producers Outokumpu and SSAB. The following December, the Dispute Resolution Board recognised the termination of the contract as illegal, as well as the refusal of Fennovoima to accept the work performed.
Following the cancellation, Fennovoima filed for international arbitration seeking €1.7bn in returned advance payments. Rosatom responded with several lawsuits against Fennovoima demanding the return the €920.5m allocated for the project and compensation for the value of its shares in the Finnish company. The total amount of claims was about €3bn. The outcome of the parallel international arbitration proceedings remains unresolved.
Fortum, once a major foreign investor in Russia’s energy sector, lost control of its Russian operations in 2023. The Russian government, under a presidential decree, placed Fortum’s assets under temporary state control. The move included seven thermal power plants and a joint portfolio of renewable energy investments.
