The Tajik Aluminum Company (TALCO) and the Russian aluminum giant, United Company Russian Aluminum (RusAl), have reached an amicable agreement.
According to the TALCO press center, TALCO and RusAl signed an amicable agreement in Moscow on March 23.
The sides reportedly accepted that there were no unresolved disputes between them.
Meanwhile, a source in the Tajik government said TALCO had purchased the Sozidaniye Business Center and the Hyatt Regency Hotel in Dushanbe from RusAl.
According to him, TALCO will pay RusAl around $150 million over a 10-year period.
The transaction appears to put a definitive end to the long-standing row between Tajikistan and RusAl, which is owned by Russian billionaire Oleg Deripaska.
As it had been reported earlier, a senior delegation of RusAl, led by RusAl chief executive Vladislav Solovyov, was in Dushanbe last December to settle disagreements with TALCO.
According to the TALCO press center, the delegation visited TALCO’s enterprises situated in Yovon district, Khatlon province and got acquainted with the process of production of aluminum at the aluminum smelter in Tursunzoda.
The relationship between RusAl and the Tajik aluminum smelter stretches back to the 1990s, interweaving the two enterprises’ commercial interests.
The dispute began after a 2004 management change at the Tajik aluminum plant. TALCO still says the previous management has stolen hundreds of millions of dollars. The two parties settled out of court, with legal fees reportedly totaling over $100 million.
The relationship was bolstered by a 2004 promise from Russian president Vladimir Putin who pledged $2 billion in investment to Tajikistan, much of it ostensibly to build the Roghun hydroelectric power plant (HPP). Kremlin-friendly RusAl was tapped to be effectively in charge of construction; in exchange, it was supposed to get a controlling interest in the aluminum plant.
In October 2004, Tajikistan signed an agreement with RusAl, according to which RusAl agreed to complete the Roghun facility and rebuild the Tursunzoda aluminum smelter. In August 2007, Tajikistan formally revoked a contract with RusAl, accusing it of failing to fulfill the contract.
After RusAl pulled out of Tajikistan in 2007, its subsidiaries Hamer Investing Ltd and Aluminum and Bauxite Company (Albaco) began arbitration in Switzerland, culminating in October 2013 with two wins. A Swiss tribunal ordered TALCO to pay Hamer $275 million related to broken supply contracts dating back 10 years. Later, a court in the British Virgin Islands held up an older Swiss award for $70 million to Albaco.
TALCO has rejected the foreign court rulings, insisting the cases be heard in a Tajik court. The company has said it has documentary evidence proving RusAl was using criminal schemes to bankrupt the Tajik plant and thereby eliminate a competitor. RusAl has dismissed the accusations, pointing out that the Swiss tribunal rejected TALCO’s $400 million counterclaim.
At the beginning of the last year, the Tajik government obligated TALCO to conclude an amicable agreement with RusAl’s subsidiaries. (News.tj/Ukrainian metal)