Court temporarily delays compensation award by state to Hellenic Shipyards; unit's fate uncertain

Tuesday, 06 March 2018 12:07

The Greek state this week apparently received a short reprieve from an international court order mandating that it pay the Hellenic Shipyards at Skaramangas up to 200 million euros, a ruling handed down last year by the International Arbitration Court of the International Chamber of Commerce (ICC).

The court had ruled that the Greek state owes the money to the shipyards' owner, the Privinvest Group, which took control of Hellenic Shipyards in 2010.

An appeals court in Athens merely provided temporary relief from the international arbitration body's ruling, whereas Hellenic Shipyards first attempted to collect its compensation in Luxembourg, by trying to confiscate Greek state assets.

Both sides, the Greek state and Privinvest Group, are also awaiting a ruling by a local first instance court over the former's petition for the shipyards' liquidation.

The conundrum faced by the Greek government in terms of the problematic shipyard continues in the form of a threat of a 34,000-euro per day fine, levied by a European court, for failing to implement a previous EU Commission decision mandating the return of subsidies from the shipyards to Greek state coffers - deemed as illegal state support dating to the late 1990s.

The money that the Commission demands be returned from the shipyards is a whopping 600 million euros.

The Greek side continues to maintain that Hellenic Shipyards is not viable in its present form, and wants to break up the company into two units, one commercial and the other for military shipbuilding, and with twin international tenders to follow within 12 months for the sell-off of the units.

Conversely, Privinvest Group, which is controlled by the French-Lebanese Safa family, believes Hellenic Shipyards is a viable company if the ICC decision is executed, which beyond the compensation, also reportedly foresees the lifting of restrictions on the construction of military vessels for third countries at the Skaramangas facility.