Romania was sued at the Vienna Court by the Dutch from Damen – Mangalia Shipyard

Damen sued Romania at the International Court of Arbitration in Vienna, demanding the termination of the association agreement concluded in 2018, through which the Romanian state became the majority shareholder (51%) of the company Damen Shipyards Mangalia SA.

The employees of the Damen construction site in Mangalia sent, last month, an open letter to the Government, through which they sounded the alarm that, in the absence of concrete measures, there is an “imminent“ of temporary interruption of activity for most of them.

Damen issued a notice of termination of the 2018 agreement to Şantierul Naval 2 Mai SA, as early as last August, demanding compensation of half a billion euros. The association agreement provides for compensation if the agreement ends due to the fault of one of the parties, according to Profit.ro.

The reason for termination cited last August by the Dutch was that, through a law adopted by Parliament at the end of June 2023, the companies in the special situation of Damen Shipyards Mangalia, with a majority state shareholder, but with private operational control, they are no longer exempted from the local legislation of the corporate governance of public enterprises.

The 2018 Damen Agreement

In 2018, the Romanian state, then represented by the Dăncilă government, nationalized the 2 Mai Naval Shipyard, after the sudden withdrawal of the South Korean investor, Daewoo. He very quickly found an investor, the Dutch from Damen, who had been successfully operating the Galati shipyard for several years. The state remained the majority shareholder, with 51% of the portfolio, through the Ministry of Economy, and Damen participated in the capital with 49%, but received the right to manage the construction site.

Since then there have been several divergences between the state and the partner. Including accusations that the partner would outsource its profit not to pay dividends to the Romanian state and several scandals related to the number of employees. The biggest of the scandals, however, was on the subject of the tender for Romania’s Multipurpose Military Corvette Supply Program, a tender won by the French manufacturer Naval Group on the basis of price.