PODGORICA, 07. Dec 2016 – Oleg Deripaska, owner of the Central European Aluminum Company, is personally suing Montenegro for the loss of his investment in the troubled KAP aluminum plant. Russian billionaire Oleg Deripaska, owner of the Central European Aluminum Company, CEAC, is suing Montenegro for “hundreds of millions of euros” over the failure of its plant in the capital, Podgorica, the firm said. CEAC, a Cyprus-based major shareholder and one of the largest creditors of the Kombinat Aluminijuma Podgorica, KAP, has been informed by its parent company En+ Group that its president, Deripaska, has personally served a Notice of Arbitration against the state of Montenegro, claiming unlawful expropriation of his investment and related treaty breaches. “Deripaska will be seeking redress in the hundreds of millions of euros,” the company said in a statement. The statement said the dispute arises from “Montenegro’s unlawful expropriation of Deripaska’s investment in KAP”, formerly Montenegro’s largest industrial concern which once contributed some 51 per cent of the country’s exports and about 15 per cent of its GDP. The dispute is also over the Russian billionaire’s investment in a bauxite mine, Rudnici Boksita Niksic, RBN. Through investments made by CEAC, Deripaska acquired a majority shareholding in KAP and the mine in Niksic in 2005, following an international drive by Montenegro to obtain foreign investment to restore the financial fortunes of the ailing state-owned companies. “Having obtained Deripaska’s significant and timely investment of funds in KAP and RBN, Montenegro subsequently engaged in a series of hostile measures aimed at removing the companies from his control,” the statement reads. In 2005, the government sold KAP to CAEC. Afer eight years under CEAC ‘s management, KAP fell into bankruptcy in October 2013, by which time it had run up debts of around 360 million euros. The government tried to revive KAP in 2008 by issuing government guarantees of 135 million euros as a loan to the Russian owner, to try to continue production. The loan was never returned, however. In 2013 the government was forced to pay more than 100 million euros in credits to KAP from the state budget. In June 2014, the Montengrin metal company Uniprom bought the bankrupt aluminium plant for 28 million euro and promised to invest 76 million euros over the next four years. However, CEAC claims that Montenegro’s actions ultimately resulted in KAP being registered insolvent in 2013, a measure which wiped out Deripaska’s investment. Deripaska, who is a controlling shareholder of Rusal, the Russian state aluminum monopoly, additionally claims that Montenegro denied his investment fair and equitable treatment, violating international law and Montenegro’s own treaty obligations. Deripaska is seeking arbitration against Montenegro under the arbitration rules of the United Nations Commission on International Trade Law, UNCITRAL, in Vienna, bringing his claims under the bilateral investment treaty executed between Russia and the Federal Republic of Yugoslavia in 1995. The place of arbitration is yet to be determined. This latest case follows ongoing claims against Montenegro before the UNCITRAL tribunal as well as courts in Cyprus filed by CEAC in November. In 2014, CEAC filed a request to a Vienna court for arbitration proceedings with the Montenegrin government, seeking over 600 million euros in compensation for losses incurred through the aluminum plant’s bankruptcy. The biggest creditors of the KAP plant are the Montenegrin government and Deripaska, via CEAC. CEAC claims the Montenegrin government interfered with the investment process, causing major damage to the company and subsequent loss of the investment. According to CEAC, Montenegro also breached an agreement on mutual encouragement and protection of investments signed between Cyprus and Montenegro. Montenegro has rejected the claims, describing the CEAC’s demands as unfounded and blaming the company for its own problems.