MAIRE (Tecnimont) wins ICC Phase 1 award finding EuroChem’s K2 termination wrongful
- London-seated ICC tribunal confirmed Tecnimont lawfully suspended the K2 contracts because of Western sanctions and is the sole adjudicative body for K2 disputes.
- The tribunal found EuroChem’s August 2022 termination wrongful and rejected EuroChem’s €1.6 billion counterclaims.
- EuroChem was ordered to pay Tecnimont and its subsidiary approximately €260 million for costs already incurred under the K2 project.
- Arbitration moves to Phase 2 to seek a permanent injunction to withdraw Russian proceedings and to decide additional legal costs and damages, with a decision expected in H1 2027.
Arbitral finding
On 28 August 2026 the London-seated arbitral tribunal constituted under the K2 Contracts issued a Partial Final Award (Phase 1 Award) holding that Tecnimont and its subsidiary lawfully suspended performance of the K2 Contracts because of Western sanctions following Russia’s invasion of Ukraine, and that EuroChem’s subsequent termination was wrongful.
Financial outcome
The tribunal found EuroChem liable to pay Tecnimont and its subsidiary approximately €260 million related to costs already incurred for the execution of the K2 project, and dismissed EuroChem’s asserted €1.6 billion counterclaims based on the purported termination.
Jurisdiction and enforcement
The tribunal confirmed it is the sole adjudicative body with jurisdiction over disputes under the K2 Contracts, and held that Russian or other state-court actions initiated by EuroChem in breach of the arbitration agreements may not be recognized or enforced under the 1958 New York Convention.
Next steps
The arbitration will enter Phase 2, in which Tecnimont and its subsidiaries will seek a permanent injunction to compel EuroChem to withdraw the Russian proceedings and will claim legal and other damages; a Phase 2 decision is expected in the first half of 2027.
Background
EuroChem engaged Tecnimont in June 2020 to build the Kingisepp 2 fertilizer plant. Tecnimont suspended the contracts in May 2022 citing EU sanctions; EuroChem purported to terminate them in August 2022, after which Tecnimont began arbitration.
Source: Maire