Bucharest, October 13, 2005

Romania won the legal case against Noble Ventures

(MEDIAFAX) – The International Center for Settlement of Investment Disputes of the World Bank, decided in favor of Romania in the legal case in which the American company Noble Ventures sought damages worth 353 million dollars from Romania, following the cancellation of the privatization process of Resita steel mill (C.S.R.).

“The decision was made public on Wednesday, October 12 th , and it is extremely favorable for Romania , denying any damages payment. The Noble Ventures request for 353 million dollars in damages payment was denied and the company got nothing from this law suit”, stated on Thursday for Mediafax , Cornel Popa , one of the lawyers who represented Romania in court.

According to the lawyer, Romania will only cover legal taxes, commissions and other expenses related to the legal actions.

" It was ordered that the arbitration costs be equally split between the parties, an usual decision regarding a series of expenses related to legal taxes and commissions” Popa said.

He also mentioned that, theoretically, the American company could request for the court ruling to be struck down on grounds of infringement of procedural rights.         

"Until now, no such objections have been raised” Popa added.

Romania has been legally represented by the Romanian law firm Musat&Asociatii and the US law firm, White&Case . In March, this year, the lawyer team from Musat&Asociatii working for this case, split from the old law firm and created a new one, called Tuca&Asociatii .

In 2000 Noble Ventures bought from the Romanian state portfolio 94 ,4 % of the total shares of C.R.S. and the total value of the transaction, including investments, raised to 85,25 million dollars.

The privatization contract was annulled in December 2002, on the basis of a contract provision which stipulated cancellation in case the investor failed to make two successive payments.

In 2001, the former owner of C.R.S. suited Romania on claims of violation of the Romanian – American Bilateral Agreement on the Promotion and Reciprocal Protection of Investments, seeking damages worth 220 million dollars. Later on, the value of damages increased to 353 million dollars.

At the beginning of 2004, C.R.S. was acquired for the symbolic price of one EURO by the German company Sinara , the distributor of the biggest Russian pipes producer, TMK group.

The International Centre for Settlement of Investment Disputes (ICSID) was established in 1966 as an institution of the World Bank Group, designed to promote increased flows of international investment, to insure a climate of stability between states and foreign investors, and an international framework for conciliation and arbitration of investment disputes, between governments and foreign investors.        

Another complaint against Romania was filed with the International Centre for Settlement of Investment Disputes, by the former exclusive provider of duty free services, the EDF Company.