18 December the Svea Region (Sweden) Court of Appeal dismissed the claim of Globe Nuclear Services and Supply GNSS, Limited to discharge the decision passed by International Commercial Arbitration in Stockholm (Sweden) in favor of JSC TENEX (JSC Atomenergoprom’s 100% affiliate). The decision of the Court of Appeal is final and not subject to any appeal. The Court of Appeal of Sweden thus approving of the decision passed by the arbitration, terminated the legal process that had lasted for more than 6 years since November 2003 and had been initiated by GNSS in order to charge over $ 1bn from the Russian budget.

The claim to charge about $ 1bn of allegedly lost profit was issued by GNSS in November 2003 as a result of suspended supplies of uranium under a contract signed pursuant to a Russia – USA intergovernmental agreement to use highly enriched uranium (HEU-LEU Agreement).

In 2003 Ministry of the Russian Federation for Atomic Energy carried out a comprehensive audit of HEU-LEU Agreement performance and concluded that the system of contracts signed in the 1990-s with a group of western companies and GNSS is subject to revision in order to ensure using part of uranium sold for cutting back nuclear weapon material.

The group of western companies agreed to alter the contract and reduce the amount of sales after a few months of negotiations. But GNSS opposed this position filing claims to a US Court and to International Commercial Arbitration against JSC TENEX. The US Court dismissed GNSS’s claim in 2004.

In June 2007 the Court in Stockholm rendered JSC TENEX’s actions as lawful. Alongside with this the Court admitted the documents filed by JSC TENEX from Russian and US investigation authorities concerning owners and officers of GNSS who were simultaneously employed by Rosatom and its affiliated companies. The Arbitration admitted that these documents testify signing a contract as a result of collusion to transfer public funds received from the sale of uranium to private persons.

“Russian nuclear industry does not need any intermediaries, though unfortunately such things occurred in the past” – said Sergey Kiriyenko, general director of State Atomic Energy Corporation Rosatom, chairman of the board of directors of JSC Atomenergoprom commenting on the decision passed by the Swedish court. “This decision represents the triumph of truth”- he added.

“Despite the intermediary schemes used in foreign trade in the past Rosatom has now switched to direct sales” – noted S. Kiriyenko.

Note:

HEU-LEU Agreement was signed in 1993 and is an international initiative in the field of “real” disarmament process: the agreement stipulates irreversible reprocessing of Russian weapon-grade uranium into nuclear fuel for the US NPPs. The agreement was signed for 20 years, until 2013, and sets out reprocessing 500 tons of weapon-grade uranium which equals to 20,000 scrapped nuclear warheads. The Agreement is implemented via a system of contracts that return full revenue into the RF budget. In 1993 – 2009 the revenue is $ 8.8bn. The executive authority for the Agreement from the Russian Federation is Rosatom; OJSC TENEX is its agent for uranium supply at the global market within the framework of the Agreement.

JSC TENEX is a major operator in the international market of goods and services for nuclear fuel cycle meeting over 40% needs of foreign NPPs in uranium enrichment services... The company has 45 years’ experience in foreign trade. 100% shares of the company are held by JSC Atomenergoprom.