December 03, 2008

Czech Republic wins arbitration with ArcelorMittal

Dow Jones reported that Czech Republic won an international arbitration with ArcelorMittal over compensation for a minority share in the group's Czech steel mill.

Mr Miroslav Kalousek finance minister of Czech said that the tribunal in Paris also ruled that the Czech state's legal fees of EUR 500,000 are to be reimbursed. He added that "The Czech Republic will not have to pay a single koruna.”

The Czech Republic had pledged to transfer the disputed shares, now administered by the finance ministry, as part of a privatization deal with Mittal Steel. The transfer, however, has been blocked by the state's legal dispute with a Czech businessman to whom the government had promised a share in the steel mill in the 1990s but then backed out of the deal.

ArcelorMittal had demanded USD 355.37 million in compensation for a nearly 14% share in its steel mill in the northeastern city of Ostrava, which it acquired from the Czech state in 2003. ArcelorMittal's Czech unit is the country's largest steel maker, which had produced 3.06 million tonnes of the steel in 2006. The company has 7,450 employees.