The world’s largest aluminum company says it has won $275 million in damages from Tajikistan’s largest enterprise.
Moscow-based Rusal said in an emailed statement on October 16 that a Swiss tribunal had found the Tajik Aluminum Company (TALCO) in breach of two 2003 agreements with Rusal subsidiary Hamer Investing, Ltd. Under those agreements, Hamer had supplied TALCO raw materials for which the state-run Tajik company had failed to pay. The tribunal ordered TALCO to pay damages in excess of $112 million, approximately $147 million in interest, and almost $15 million in legal fees, the Rusal statement said.
The statement also said the tribunal had thrown out TALCO's $400 million counterclaim, in which the company argued that Hamer’s original contracts should be deemed invalid as they had been won by corrupt means.
Rusal “intends to make every effort to enforce the award in all relevant jurisdictions in the event that TALCO does not voluntarily comply with the award,” the statement said.
TALCO spokesman Igor Sattarov said the Russian giant had broken a confidentiality agreement. In comments carried by the Asia-Plus news agency on October 16, he suggested that TALCO could appeal since, “according to international norms, the [legal] procedure is quite long and provides for a few more stages” – including a hearing in a Tajik court.
TALCO is the largest aluminum smelter in Central Asia and one of the few industries still functioning in post-Soviet Tajikistan. Considering its size – the plant uses 40 percent of Tajikistan’s electricity, according to the World Bank – Tajikistan’s population at large knows little about its operations.
TALCO’s profits, estimated in the hundreds of millions of dollars annually, are managed through a network of opaque shell companies registered in the British Virgin Islands.
“If TALCO were benefiting the state budget, no problem. But we have no evidence what revenues the company brings into Tajikistan,” a consumer watchdog in Dushanbe said this summer.
In 2009, a purported US diplomatic cable published by Wikileaks said, “The real money-makers are the president and members of his inner circle, who are believed to have financial control of the offshore company that buys from TALCO.”
Authorities have long stalled on publishing a TALCO audit, which they had promised after admitting to deliberately misreporting National Bank balances to the International Monetary Fund in 2008.
In many countries, the news from Rusal would have come at an awkward time. President Emomali Rakhmon is running for another seven-year term next month. But after 21 years in power, the strongman is deeply entrenched and authorities have prevented the only serious opposition candidate from registering.
TALCO has been involved in costly litigation before. In 2008, it settled in London after a multi-year dispute with a former director and supplier after fighting one of the most expensive cases in UK legal history. Legal bills reportedly totaled over 3.6 percent of Tajikistan’s 2007 GDP, “fueling charges” – wrote a US diplomat in another purported cable – “that the government of one of the world's poorest countries has misplaced priorities.”