EuroChem unit moves HC to seize assets worth $2.2 billion of Italian company MAIRE

The substantive hearing in the High Court is scheduled for January 13. (File Photo)

EuroChem SeveroZapad-2 (ECSZ-2), the Russian arm of Swiss-based fertiliser firm EuroChem, has approached the Bombay High Court seeking recognition and enforcement of a Moscow Arbitration Court order directing the joint recovery of over 171 billion rubles ($2.2 billion, or Rs 19,000 crore) from Italian firm Tecnimont SpA and its Russian subsidiary MT Russia, both part of the MAIRE Group of Italy.

The appeal to Indian jurisdiction is made in accordance with procedures provided for under international law, ECSZ-2 said in a statement. “The Russian Federation and the Republic of India are bound by a bilateral treaty on legal assistance in civil and commercial matters dated October 3, 2000, which provides for the recognition and enforcement of court decisions,” it added.

The legal dispute arose from MAIRE group companies’ failure to fulfil their obligations under the construction of one of Europe’s largest ammonia and urea production plants in Kingisepp (Leningrad Region, Russia). In November, the Moscow Arbitration Court ruled in favour of ECSZ-2, ordering the contractors to pay the unearned advance, interest for the use of funds and damages caused by the project’s disruption. MAIRE’s units (Tecnimont SpA and MT Russia LLC) undertook to fulfil a contract for the construction of an ammonia and urea plant in Kingisepp (near St. Petersburg, Russia).

“In May 2022, MAIRE refused to build the plant, citing the entry into force of EU sanctions towards Russia. EuroChem Severo-Zapad-2 disagreed and filed a lawsuit. MAIRE would not have been able to complete the plant within the timeframe stipulated in the contract in any case,” ECSZ-2 said in a statement. According to the contract, the plant was to be completed by September 2023. However, in May 2022, when MAIRE withdrew from the project, construction was only 25 per cent complete, it said.

“The legal proceedings in India represent a logical and consistent step in implementing our legal strategy aimed at ensuring enforcement of Russian court decisions in jurisdictions where the MAIRE group conducts its operations. We will continue to use all mechanisms provided for under international law to restore our legitimate rights and interests,” ECSZ-2 stated.

The High Court has already accepted the Russian company’s application for consideration. ECSZ-2 said that it is currently exploring the possibility of filing applications in other jurisdictions where the MAIRE group operates, including CIS countries, BRICS nations, Africa and the Middle East.

Russia has agreements with 96 countries on mutual recognition of court decisions.

The specific MAIRE assets subject to seizure for a total of $2.2 billion include: 100 per cent of shares in subsidiary Tecnimont Pvt. Ltd (TCMPL), registered in India, TCMPL’s receivables from the parent company amounting to approximately 23 million euros, claims under a long-term interbank loan in favour of TCMPL for more than 18.7 million euros, cash in accounts at Indian banks and payments under major EPC contracts with Indian public and private clients, such as Indian Oil Corp. Ltd (IOCL) (projects in Gujarat and Odisha, the statement said. If granted, the reliefs sought could affect India-based assets and contractual payments linked to ongoing projects being executed by the Maire Group in India, it said.