Tsegay Laurendeau, a partner at Signature Litigation, said the companies could also lose “lucrative” future projects in Russia if Russian sanctions are eventually lifted.
“Both companies undoubtedly suffered large losses, not to mention the prospects of future lucrative projects in Russia. Given the political context of the Fortum-Vestas conflict, settlement agreements were reached at the highest political level in both Finland and Denmark. I would expect that there may have been some long-term financial value compensation from the relevant states,” Laurendeau said.
Earlier this month, Danish wind turbine manufacturer Vestas and Finnish state-run power company Fortum announced an arbitration settlement of more than €200 million related to a wind power project in Russia.
fortum started arbitration The Danish manufacturer filed a lawsuit at the International Chamber of Commerce in Stockholm in 2022 after it terminated a wind turbine supply contract with Russia following the invasion of Ukraine. However, details of the incident were not revealed until 2023.
Vestas previously said it terminated the contract to comply with EU sanctions that prevent the manufacturer from delivering, installing and maintaining wind turbines for wind farms in Russia.
Fortum was seeking to recover more than 200 million euros after Vestas terminated its contract.
upcoming projects
The CEOs of both companies confirmed their intention to continue cooperating even after the settlement announcement.
“While the differences between Vestas and Fortum have become significant and unusually public, over time it has become clear that it is in the interests of both parties to resolve the dispute. We look forward to continuing to operate our existing wind farms and exploring new wind farms together with Fortum, for the benefit of Vestas, Vestas and Europe’s energy system.” ) said Henrik Andersen.
Meanwhile, Fortum president and CEO Marcus Lauramo said the settlement “satisfies both parties” and “allows us to move forward and consider future prospects.” .
Laurendeau said he hopes some of the companies’ previous efforts together on projects in Russia will be redirected to future projects, if possible.
“Reading between the lines, I believe that to the extent that it is possible to reduce losses and redirect the advance payments made by Fortum to Vestas for the Russian project and the equipment manufactured by Vestas for Fortum to future projects, The parties must have agreed to do so,” Laurendeau said.
He added: “Given increased competition and costs, an agreement between two leading companies in this sector to continue working on existing projects makes excellent commercial sense.”
Vestas has been contacted for comment. Fortum declined further comment.
Additional reporting by Craig Richard.
