Cash payment to come from Stora Enso Biomaterials capital expenditure
Montes del Plata settles €200m arbitration case
The arbitration relates to contracts for the delivery, construction, installation, commissioning and completion by Andritz of major components of the Montes del Plata pulp mill project in Punta Pereira, Uruguay.
Pulp project from the Uruguayan government
Montes del Plata received an environmental permit for its pulp project from the Uruguayan government in December 2010.
Kirsi Seppäläinen, head of communications, Stora Enso Biomaterials, told FoodProductionDaily, the case relates to the construction of a greenfield mill in Uruguay and started in 2014.
“As the arbitration case was related to the construction of the mill, it does not have much significance for the food industry,” she said.
“Stora Enso was not a direct party, as the case was against Montes del Plata of which we own 50% (Chilean company Arauco owning the other 50%).”
The claims related to contracts for major equipment that Andritz delivered to the Montes del Plata Pulp Mill project.
Celulosa y Energía Punta Pereira
Celulosa y Energía Punta Pereira (CEPP), a joint operations company in the Montes del Plata group formed by Stora Enso and Arauco, disputed the claims brought by Andritz and pursued claims of its own amounting to $110m (€91m) against Andritz for a breach of its obligations under the contracts.
Stora Enso has reported the item as contingent liability. No provisions were made in Montes del Plata’s or Stora Enso’s accounts for these claims and counterclaims.
The parties have now signed a settlement agreement and will withdraw the case from arbitration.
The settlement agreement results in a $44m (€40m) cash payment to be made by Montes del Plata and will be recorded as capital expenditure in Stora Enso’s Biomaterials segment in the second quarter of 2015.
