TALCO does not want its relations with RusAl to affect Tajik-Russian bilateral cooperation

23/12/2013 15:42
Payrav Chorshanbiyev
Views: 8723

DUSHANBE, December 23, 2013, Asia-Plus -- The Tajik Aluminum Company (TALCO) does not want its relations with Russia’s RusAl aluminum company to affect bilateral political and economic cooperation between Tajikistan and the Russian Federation, TALCO Chief Financial Executive Sherali Kabirov told journalists in Dushanbe on December 23.

“At least, we have been doing everything in our power not to allow this,” TALCO chief financial executive noted.

On the recent litigation between RusAl subsidiary Hamer Investing, Ltd and TALCO, Kabirov noted that Hamer Investing, Ltd had cooperated with TALCO for only a year and a half.  “Today, this company demands that TALCO pay a huge amount to it,” Kabirov said.

According to him, the fact that the procedure, which should have been confidential, has become public has come surprise to the TALCO management.

“There are many ways to solve this issue positively, in the interests of our nations,” TALCO chief financial executive added.  

 We will recall that Tajikistan formally revoked a contract with RusAl for the construction of the Roghun hydroelectric power station (HPP) in August 2007.  The cancellation of the contract also included the “annulment” of the October 2004 agreement on “long-term cooperation” with RusAl.  According to the contract, RusAl agreed to construct the Roghun HPP.

RusAl reported in October this year that it has won $275 million in damages from TALCO.  According to TALCO, a Swiss tribunal found TALCO in breach of two 2003 agreements with RusAl subsidiary Hamer Investing, Ltd.  Under those agreements, Hamer had supplied TALCO raw materials for which the state-run Tajik company had failed to pay.  The tribunal ordered TALCO to pay damages in excess of $112 million, approximately $147 million in interest, and almost $15 million in legal fees, the RusAl statement said.

The statement also said the tribunal had thrown out TALCO’s $400 million counterclaim, in which the company argued that Hamer’s original contracts should be deemed invalid as they had been won by corrupt means.

Besides, Alumina & Bauxite Co. Ltd. (Albaco), a subsidiary of RusAl, filed an application with the Eastern Caribbean Supreme Court for the appointment of liquidator for CDH Investments Corp (CDH).  According to press release issued by RusAl, Albaco filed the application in order to “get confidential materials of CDH Investments Corp.”  “The liquidator that will be appointed by us will collect and disclose the information on money transfers, directors and other materials concerning CDH,” the press release said, noting that Albaco obtained an order dated October 16, 2013 from the High Court of Justice of the British Virgin Islands, entering judgment on an arbitration award issued for approximately 70 million USD against CDH).

The arbitration award relates to the supply of alumina to the Tajik aluminum smelter, press release said.  The arbitration award was reportedly issued in Albaco’s favor by a three-member tribunal sitting in Switzerland in accordance with the Rules of the International Chamber of Commerce.  The tribunal held that CDH had breached a supply contract with Albaco for the sale-purchase of alumina.

The aluminum plant, run by the Tajik Aluminum Company (TALCO), was launched in late March 1975.  It is one of the ten largest aluminum smelters in the world and provides more than 70% of the country’s foreign currency earnings, consuming 40% of the country’s electrical power.  Tajikistan does not mine alumina but imports the raw material through tolling arrangements.