CANADIAN & U.S. INVESTORS CLAIM US $ 183 FROM POLAND

26 08 2008

2008-08-25

U.S., Canadian Investors Ask European Union to Impose US$183-Million in Damages on Poland

PRNewswire DUNMORE, Pennsylvania August 25   http://media.netpr.pl/PressOffice/PressRelease.105497.po

 

DUNMORE, Pennsylvania, August 25 /PRNewswire/ —

Investment companies, Elia Inc., and its sister company Renaissance Trust Inc, of Dunmore, Pennsylvania, and Dessaport International Corporation Inc. of Halifax, Nova Scotia, have filed a formal complaint to the European Union about Poland’s confiscatory treatment of their Gdansk-based joint stock company, EuroPort Inc Poland.

The investors lodged the complaint with the European Commission’s Directorate General for Competition, alleging EuroPort has suffered losses totaling US$183-million as a result of actions by the Port of Gdansk Authority (ZMPG), and Poland’s Ministry of the Treasury, owner of 85 percent of ZMPG’s shares.

EuroPort was building a modern deepwater grain terminal in the Port of Gdansk, at an estimated cost of US$76-million, to facilitate the import and export of bulk agricultural products to and from Poland and its neighboring countries in Central Europe.

The project, backed by the European Bank for Reconstruction and Development and the Royal Bank of Canada, had been approved by the ZMPG and the Polish Government in 1995.

Construction began in late 1998 and was half-way completed by August 2002, when a new Board of Directors took over control of the state-controlled ZMPG. Shortly thereafter, ZMPG’s managing directors began obstructing EuroPort’s completion, according to the complaint, and ultimately succeeded in stalling the project. Expenditures to date total US$59 million.

This account is part of the complaint to the European Commission — as is the assertion that ZMPG’s board of directors, dominated by post-Communists, the complaint alleges, was associated with “a powerful group of business persons and politicians who have had extraordinary control over what transpires in their territory even to the extent of influencing the local courts.”

Hostile actions documented by the American and Canadian investors in their complaint to the European Commission include repeated illegal attempts by ZMPG, to nullify their 25-year lease on the pier and adjacent land, signed in 1995.

The American and Canadian investors allege those illegal acts constitute an attempt to evict them without compensation and eliminate EuroPort from the market.

Discriminatory and hostile actions directed at EuroPort, including intimidation by armed agents, prevented the investors from securing additional financing needed to complete their project, according to the complaint. Moreover, arbitrarily created administrative obstacles have frustrated EuroPort’s repeated attempts to reach a fair settlement of their compensation claims with ZMPG and the Government of Poland.

Interventions on EuroPort’s behalf by the American and Canadian embassies in Warsaw have been futile — as were the reconciliation hearings in the Court of Arbitration of the Polish Chamber of Commerce.

Local courts in Gdansk have repeatedly refused to hear EuroPort’s pleas for redress. The grain terminal remains unfinished. EuroPort has lost close to US$200 million and efforts of its American and Canadian owners to find a solution in Poland continue to be stonewalled.

“The owners of EuroPort and their advisors believe their complaint to the European Commission,” says their formal brief to Brussels, “that in order to have a fair settlement of the situation, authorities outside Poland … must participate and fully examine the evidence.”

Since 2003, EuroPort has testified before two arbitration hearings in Warsaw, instigated an investigation by the Prosecutor’s Office in Gdansk, appealed to the Anti-Corruption Bureau in Warsaw, and made numerous approaches to the Ministry of the Treasury through the American and Canadian embassies. All these efforts have met with hostile indifference, rejection or inaction on the part of Polish authorities.

Elia Inc. and Renaissance Trust Inc

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