The Athens Court of Appeal last week rejected the Greek government’s request to set aside a 2017 arbitration award worth more than €1.2 billion to Privinvest Group for the government’s default on payments to Privinvest and its subsidiary Hellenic Shipyards.
Hellenic Shipyards in Skaramangas, Greece, builds and modernizes Greece’s high-performance submarines and is one of the largest shipyards in the eastern Mediterranean. In 2010, Privinvest Group made substantial investments in Hellenic Shipyards, but the Hellenic Republic defaulted on its obligations. The International Chamber of Commerce (ICC) found that the Greek government also mishandled a European Union state aid case. As a result, Hellenic Shipyards suffered severe losses and had to suspend its operations.
Hellenic Shipyards and the Privinvest Group started arbitration proceedings against the Hellenic Republic in ICC. In September 2017, an arbitration tribunal issued an award in favour of Hellenic Shipyards and the Privinvest Group.
In addition, since March 2018, a special administrator appointed by the Hellenic Republic has been in charge of Hellenic Shipyards, and Privinvest has had no control over the company or its operations. The special administrator is in the process of selling the shipyard, in effect executing the Hellenic Republic’s goal of expropriating Privinvest.
On 8 April 2019, the Athens Court of Appeal upheld the ICC’s award worth more than €1.2 billion award to Privinvest.
Privinvest commented: “In light of the decision by the Athens Court of Appeal, Privinvest calls on the Hellenic Republic to finally return to the path of legality. The Hellenic Republic must now respect its legal obligations and stop the expropriation. In the meantime, Privinvest will continue to pursue its rights before all available venues in Greece and internationally.”
Privinvest added: “If the Hellenic Republic had implemented the ICC award, it could have given new life to Hellenic Shipyards. With the income from submarine contracts, and freed from limitations on exports, Hellenic Shipyards could have become a highly profitable shipyard that would have benefited Hellenic Shipyard’s 1,000 workers, the Skaramangas region and the Greek economy. Instead, the Hellenic Republic ignored its obligations under the award, as well as the pleas of Hellenic Shipyards to respect the award, and made no payment.”
The appeals court decision last week “fully confirmed the validity of the award, vindicated Privinvest and removed the Hellenic Republic’s last excuse for not respecting the binding judgment of the ICC,” Privinvest said.