GvW Graf von Westphalen represents the Central European Aluminum Company in international arbitral proceedings against the State of Montenegro

The Cyprus-based Central European Aluminum Company (CEAC) has initiated ad hoc arbitral proceedings against the State of Montenegro and other Montenegrin entities over Montenegro’s biggest industrial enterprise Kombinat Aluminijuma Podgorica (KAP). The principal subject matter of the arbitral proceedings are various breaches of agreements on KAP signed by CEAC and the State of Montenegro in 2009/2010, followed by insolvency of KAP. The total amount of CEAC’s initial claims is €100m, but CEAC reserved the right to increase its claim. The place of arbitration is Vienna. In these proceedings CEAC is represented by GvW Graf von Westphalen.

CEAC was established to manage the aluminium business of the EN+ Group in Central and Eastern Europe. In 2005, CEAC acquired a majority holding in KAP and invested heavily to build a leading aluminium producer in Central Europe. However, CEAC’s ambitions for KAP have been consistently undermined. The liability of the State of Montenegro for misrepresentation of KAP’s financial status at its acquisition by CEAC had been the subject matter of previous arbitral proceedings in which CEAC had already been represented by GvW.

Now, CEAC has been confronted with the Government of Montenegro itself having initiated insolvency proceedings over KAP and with CEAC having been removed from its operating role - without any compensation for its massive investments. CEAC claims that the Government of Montenegro acted inappropriately and breached the agreements entered into in 2009/2010. 
CEAC believes that a number of EU companies are facing similar problems in Montenegro and that the actions of the Government of Montenegro represent a pattern which is not in accordance with the requirements set forth in the Stabilisation and Association Agreement between the European Communities, their Member States and the Republic of Montenegro.

Under the lead of Frankfurt based partner Dr Matthias Menke (Corporate/M&A), CEAC is represented by a GvW-team consisting of partners Felix Prozorov-Bastians (Arbitration), Dr Marco Zessel (Corporate/M&A) and Florian Wolff (Finance/M&A) as well as associates Dr Lars Weber (Corporate/M&A) and Stefanie Slapke (Commercial).