Russian Billionaire Sues Montenegro Over Lost Investment

Russian tycoon Oleg Deripaska, owner of the Central European Aluminum Company, CEAC, is suing Montenegro for "hundreds of millions of euros" over the failure of its plant in the capital, Podgorica, the firm said on Wednesday.

CEAC, a Cyprus-based major shareholder and one of the largest creditors of the Kombinat Aluminijuma Podgorica, KAP, has been informed by its parent company En+ Group that its president, Deripaska, has personally served a Notice of Arbitration against the state of Montenegro, claiming unlawful expropriation of his investment and related treaty breaches.

"Deripaska will be seeking redress in the hundreds of millions of euros," the company said in a statement sent to BIRN on Wednesday.

The statement said the dispute arises from "Montenegro's unlawful expropriation of Deripaska's investment in KAP", formerly Montenegro's largest industrial concern which once contributed some 51 per cent of the country's exports and about 15 per cent of its GDP.

The dispute is also over the Russian billionaire's investment in a bauxite mine, Rudnici Boksita Niksic, RBN.

Through investments made by CEAC, Deripaska acquired a majority shareholding in KAP and the mine in Niksic in 2005, following an international drive by Montenegro to obtain foreign investment to restore the financial fortunes of the ailing state-owned companies.

"Having obtained Deripaska's significant and timely investment of funds in KAP and RBN, Montenegro subsequently engaged in a series of hostile measures aimed at removing the companies from his control," the statement reads.

In 2005, the government sold KAP to CAEC. Afer eight years under CEAC 's management, KAP fell into bankruptcy in October 2013, by which time it had run up...