The Damen Group sued the Romanian state at the Court of Arbitration in Vienna

The Damen Group 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 percent) of Damen Shipyards Mangalia SA.

The dispute between the Damen Group and the Romanian state intensified in August 2023, when Damen announced that it was terminating the association agreement with the Romanian state regarding the Mangalia Naval Shipyard, as a result of the fact that, through the adoption of Law no. 187/2023 (amending GEO no. 109/2011 on the corporate governance of public enterprises – no), the legal framework under which the association operated was cancelled, according to a company press release. “Following an already difficult collaboration and now facing the fait accompli of no longer having operational control in the Mangalia construction site, Damen thus faces not only a breach of contract, but also a breach of trust by the state Romanian”, specified the Damen Group, at that time.

In 2018, Damen decided to invest in Mangalia and agreed to transfer to the Romanian side 2 percent of the shares of the company that operates the Mangalia Shipyard (allowing the Romanian state to become a majority shareholder in this company, with 51 percent), in exchange for receiving and keeping operational and managerial control of the shipyard.

Law no. 187/2023 was considered by Damen to be a breach of this agreement. Later, the Damen Group requested compensation from the Romanian state, which, according to some sources, amounted to 500 million euros. The trial at the International Court of Arbitration in Vienna is the result of this litigation.

After the Damen Group announced its withdrawal from Mangalia, the shipyard was practically in free fall. Neither Damen nor the Romanian state have brought new contracts, and a way of understanding between the shareholders seems no longer possible. As a result, the 2,000 employees of the construction site and subcontractors fear that they will remain on the roads.

We also remind that SN Damen Mangalia should have worked in tandem with SN Damen Galati to expand Damen’s order portfolio. In discussion, for example, was the project of building ferries, but also that of corvettes for the Romanian Naval Forces – which could be realized, as a work variant, in both shipyards – a project which, however, resulted in a resounding failure at the MApN level. Currently, while several military ships are being built at SN Damen Galati, SN Mangalia seems to have completely drifted economically.