The Amsterdam court rejected the company's claim for €660 million

EuroChem failed to convince the first instance of the Dutch court that it was right in its dispute with the IMR company, a shareholder of the contractor for the development of the Gremyachinskoye potash deposit. Eurochem tried to prove that the contractor's management and IMR paid a bribe to a company employee to hide the shortcomings of their technology. The court rejected EuroChem's claims for €660 million, but the Russian company intends to continue the proceedings.

The District Court of Amsterdam rejected the claim of the Eurochem holding controlled by Alexander Melnichenko for €660 million against the company International Mineral Resources (IMR), which is owned by the founders and main shareholders of the Kazakh ENRC Alexander Mashkevich, Alidzhan Ibragimov and Patokh Shodiev. The court's decision was announced yesterday by IMR. “The court ruled that all of EuroChem’s claims were unfounded and did not withstand careful legal scrutiny,” IMR said in a statement.

This lawsuit was part of EuroChem’s dispute, which has been going on since 2012, with the former contractor for the construction of one of the production shafts of the Gremyachinskoye potash deposit (the development project is estimated at $2 billion) - the Shaft Sinkers company, the main shareholder of which is IMR. The Shaft Sinkers technology turned out to be ineffective: it turned out that cementing was not justified due to the presence of unconsolidated sand on the site. Development was suspended, and the technology was changed to freezing, which led to a delay in the development of the field (commissioning shift from 2012 to 2015).

In the fall of 2012, Eurochem filed claims against the contractors with the Swiss Chamber of Commerce in Zurich and the International Chamber of Commerce in Paris. Initially, Eurochem demanded compensation of $800 million, later the amount of the claim was increased to $1.06 billion, and then reduced to $917 million. A decision on the claims in Zurich and Paris is expected in 2015.

At the same time, in a lawsuit against IMR, filed in a Dutch court in the spring of 2013, the Russian company accused the defendant of “blatant fraud aggravated by a bribe,” claiming that IMR management gave one of the EuroChem employees a bribe of several hundred thousand rubles for concealing the possible inefficiency of Shaft Sinkers' work at Gremyachinsky. The lawsuit alleged that IMR contributed to the suppression of a report questioning the effectiveness of the containment technology used by Shaft Sinkers in the field. IMR representatives stated that the EuroChem employee received the money in accordance with a formal agreement he signed with Shaft Sinkers for the provision of consulting services with the knowledge of his management. In July 2013, a Dutch court issued a preliminary ruling in favor of EuroChem and placed restrictions on IMR's assets, setting the amount at €886 million (including principal and interest).

EuroChem representative Vladimir Torin told Kommersant that the company is “disappointed” by the Amsterdam court’s decision, but will continue the proceedings in the Netherlands. “As part of the ongoing litigation with Shaft Sinkers, we have found additional evidence of fraudulent activities that the court in the Netherlands has not yet had the opportunity to examine,” he said. According to him, these additional facts “will be forwarded to the next stage of the case in the Netherlands.”

Maxim Kulkov, head of the dispute resolution practice at the law firm Freshfields Bruckhaus Deringe, notes that going through all the instances in European courts takes an average of two to four years. In his opinion, Eurochem, when filing a claim against the contractor’s shareholder, expected, if it won, to receive not only monetary compensation, but also additional arguments for the main legal disputes in arbitration.

Denis Skorobogatko, Olga Mordyushenko

Eurochem did not prove the bribe