Fortum and Vestas clash over Russia sanctions

Finnish utility Fortum has launched €200m arbitration proceedings in Sweden against Vestas in a dispute about the impact of Russian sanctions.

Vestas reported yesterday that Fortum has launched the arbitration proceedings in the International Chamber of Commerce in Sweden because it could not receive turbines for planned projects in Russia. Vestas said it had to terminate the orders to comply with European Union sanctions arising from Russia's invasion of Ukraine.

Henrik Andersen, president and CEO of Vestas, said: “We strongly believe the arbitration to be without merit, and we are astonished and dismayed a state-owned company from a fellow EU-country would openly question the sanctions against Russia and thereby the unity of EU countries.”

Fortum said it would "vigorously defence itself against false claims by former business partner Vestas that it flouted sanctions against Russia". It said the dispute is related to "sizeable advance payments" it made to Vestas for 50 wind turbines for projects that were not built.

Nora Steiner-Forsberg, general counsel at Fortum, said: “We are at a loss to understand why our long-standing business partner Vestas would suddenly question our adherence to EU sanctions in this case. There is absolutely no doubt about Fortum’s commitment to upholding and defending EU laws, EU sanctions, and ultimately EU unity."