Alexey Mordashov's Power Machines won a lawsuit against the Vietnamese state corporation Vietnam Oil and Gas Group (PetroVietnam) in the Singapore International Arbitration Center, sources said RBC. This is said to be the first public victory for a sanctioned Russian company in international arbitration since at least 2022. The court recovered more than $500 million in favor of Power Machines.
A representative of Power Machines only confirmed that the court in November 2023 ruled in favor of the company. He noted that Power Machines is satisfied with the decision, but “the terms of the decision are confidential and cannot be disclosed to either party at this stage.”
In 2013, Power Machines and Technical Services Corporation (a subsidiary of PetroVietnam) received a contract for the construction of the Long Phu-1 thermal power plant in Vietnam. Its cost was estimated at $1.2 billion. After Power Machines came under American sanctions in 2018, the project was suspended. In 2019, the Russian company suspended participation in the project, citing force majeure. Technical Services Corporation did not consider the US restrictions to be a basis for force majeure.
The $500 million recovered in favor of the Russian company is the actual costs of constructing the project, including unpaid invoices, the cost of equipment and work that were ordered and completed by the date of termination of the contract. The Vietnamese side, in turn, demanded to pay it $3.5 billion, but the arbitration court rejected the claim, sources told RBC.
Read more about the problems during the construction of thermal power plants in the 2019 Kommersant article “Our dongs are heavy”.