The Dutch company HPK Engineering, hired by the Serbian government back in 2015 to manage Smederevo based steel mill, requested a Court in Washington to enable execution of the decision by the international arbitration in London, based on which steel mill has to pay a compensation of US$12.4 million due to illegal termination of an agreement.
HPK filed a petition at the Federal Court in Washington D.C., in which it demands that, under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, decision adopted in May by the London Court of International Arbitration is confirmed.
In May, the London Court of International Arbitration (LCIA) determined that “Zelezara” unlawfully terminated agreement under which HPK was hired in 2015 to improve business activities of, at the time state-owned company, thus attracting buyer for its privatization.
The agreement with HPK Engineering was terminated in June 2016, under the argument that company did not meet obligations defined by the agreement, which have never been published. “Zelezara Smederevo” was sold to China’s Hesteel Group in 2016, but the Dutch company claims that agreement it has signed was terminated without reason, “just before the completion of privatization.”
HPK claims in its petition that “Zelezara” and the Serbian government refuse to pay a bonus of US$10 million, which was a part of the agreement if privatization takes place within five years of its signing.
By the decision of London arbitration HPK is entitled to a bonus of US$10 million and the amount for additional expenses, but the Serbian government and steel mill do not want to pay this sum.