PRESS RELEASE
Palais D’ Ivoire House, 12 Them. Dervis Ave., Nicosia, Cyprus
Nicosia District Court Bans KAP Property Transactions
Court’s ruling supports request of CEAC’s parent company EN+ Group
Nicosia, Cyprus, 07 July 2014 – The District Court of Nicosia, Cyprus, has ordered an injunction on operations involving the assets of Kombinat Aluminijuma Podgorica (KAP) in connection with a claim filed by En+ Group, the parent company of the Central European Aluminum Company (CEAC) for the repayment of €44m.
The injunction covers all transactions involving KAP assets, including the recently announced sale by the government of Montenegro of the smelter to Uniprom for €28m. Other transactions that have been blocked include the alienation of property, the disbursement of monies from KAP’s accounts, and the sale of any aluminium produced at the plant.
The injunction remains effective until the court passes final judgment on En+ Group’s claim. Pursuant to the existing international agreements, the judgment by the Nicosia District Court will be mandatory for Montenegro, as well as other countries where the KAP’s contractors are incorporated.
Commenting on the Court Ruling, CEAC’s general counsel Pavel Priymakov said:
“We welcome the Nicosia District Court’s ruling, which clearly demonstrates that Montenegrin authorities’ sale of KAP assets violates both Montenegrin and international laws. The bankruptcy proceedings have been littered with other such violations: from the manager’s failure to make a financial analysis of the asset divestment options, to his single-mindedness to offer KAP for sale to just one buyer and his routinely ignoring the opinions of all creditors other than the government of Montenegro. The bankruptcy proceedings have been repeatedly breached, but the Montenegrin courts have flagrantly disregarded these numerous violations of the law, which forces one to question whether there is any effective separation of executive and judicial power in Montenegro, or whether the latter is just an instrument of the former. The Nicosia court’s intervention is more than timely, as the Montenegrin courts are clearly incapable of upholding the rule of law and enforcing the investor protection that is provided for by Montenegro’s own laws.”
CEAC has initiated two arbitrations against the government of Montenegro for breach of the KAP settlement agreement of 2009, and the foreign investments protection agreement between Cyprus and Montenegro. The claims total more than €700m, including the damages incurred as a result of the actions of the government of Montenegro and for violation of investor partnership agreements.
About Central European Aluminum Company:
The Central European Aluminum Company (CEAC) was established in 2005 to manage the aluminium business interests of the En+ Group in Central and Eastern Europe. CEAC’s portfolio includes Aluminum Plant Podgorica and Bauxite Mines Niksic, both in Montenegro, and Alumina Refinery Cemtrade in Oradea, Romania. All companies within the CEAC Group benefit from international best practices and knowledge transfer, rationalization and efficiency.