Bulgaria Refuses to Pay Russia Damages over Belene N-Plant
Bulgaria's government has made it clear it is not daunted by the risk of being taken to arbitration by the Russian contractor in Belene nuclear project, should it decide to abandon it.
"Bulgaria will not have to pay damages if it withdraws from Belene project. Formally the project is based on an intergovernmental agreement between Bulgaria and Russia, not on a contract," Finance Minister Simeon Djankov told the morning broadcast of state TV BNT on Thursday.
The statement came a day after Russia's state-owned energy company Rosatom urged Bulgaria to quickly make up its mind about the Belene nuclear power plant project in a sign that it is already losing patience.
In October 2011, Bulgaria and Russia reached an agreement to extend the negotiations over Belene nuclear project by another six months as of the beginning of October amidst continuing haggling over its price and feasibility.
On Friday, Bulgarian Prime Minister Boyko Borisov declared that the future second Bulgarian nuclear power plant at Belene will not be solely a project of Bulgaria and Russia if it takes place at all. He stressed that his Cabinet will keep working in the upcoming weeks in order to "diversify" the future participants in the Belene NPP project.
Rosatom's subsidiary Atomstroyexport has already assembled the reactor for the first block of the NPP to be built in the Bulgarian Danube town of Belene.
Borisov has also hinted that the Belene reactor could be placed in Bulgaria's sole existing Kozloduy NPP.
Moscow has repeatedly warned that Bulgaria will be sued and obliged to pay EUR 1 B in damages if the project collapses.
Experts however have commented that the prospect of paying hefty compensation to the Russian contractor is not that scary.
According to them Russia, for whom this project is very important from a political rather than an economic point of view, is very likely to agree to more delays.
Besides the very constitution of the arbitral tribunal takes a few months. In some cases this process can be quite long, especially when the arbitration procedure has not been explicitly stipulated in the contracts.
Practice shows that it takes a long time before the International Court of Arbitration comes up with a ruling. Under the law, this should take no more than a year, but actually cases drag on for about two-three years.
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