TENEX involved in arbitration against GNSS in connection with US$1 billion loss profit claim
Jones Day acted as co-counsel to Techsnabexport (TENEX), a Russian state-owned company, in defense of a claim by Globe Nuclear Services and Supply (GNSS) for alleged lost profits amounting to almost US$1 billion. On June 11, 2007, a panel of arbitrators acting under the rules of the Arbitration Institute of the Stockholm Chamber of Commerce rejected GNSS's claim against TENEX. The arbitrators also ordered GNSS to pay TENEX more than USD$6 million in reimbursement of TENEX's costs of arbitration.
TENEX and GNSS concluded a contract in 2000, pursuant to which TENEX would sell natural uranium (UF6) to GNSS. This contract was related to a 1993 treaty between the United States and Russia (the HEU Agreement) that established the "Megatons to Megawatts" program, by which low enriched uranium (LEU), derived from highly enriched uranium (HEU) in Soviet-era nuclear warheads, is sold by Russia to the United States. TENEX acts on behalf of the Russian Government in the implementation of the HEU Agreement and sells, pursuant to certain inter-Governmental agreements and commercial contracts, stipulated quantities of the natural uranium component of LEU.
In addition, TENEX was obliged to terminate sales of natural uranium to GNSS in 2004, in order to protect the continued implementation of the HEU Agreement. GNSS contested this termination in the 2007 arbitration, but its claim was dismissed.
Unhappy with the decision, GNSS sought to set aside the Award on the grounds of alleged deficiencies in the arbitral procedure before the Svea Court of Appeal in Stockholm. In December 2009 the Court of Appeal dismissed the challenge. The arbitral Award is now final.
Globe Nuclear Services and Supply (GNSS) v. Techsnabexport, SCC 156/2003 (Arbitration Institute of the Stockholm Chamber of Commerce)