Severstal to get $267 million compensation from US firms
04 Dec 2008
The US supreme court has awarded Russia's Severstal $267 million in compensation claims after it won a lawsuit against US-based Massey Energy Company and its subsidiary Central West Virginia Energy Company.
The court also barred any further appeals by Massey Energy Company and Central West Virginia Energy Company in connection with compensatory and punitive damages, including interest, totalling approximately $267 million, originally awarded to Wheeling Pittsburgh Steel and Mountain State Carbon in July 2007 by a West Virginia Circuit Court jury.
Severstal's subsidiaries earlier sued Massey Energy over its failure to honor contracts on coal supplies.
Severstal North America, a subsidiary of OAO Severstal, said the decision effectively puts to an end a contract dispute between Massey Energy Company and its subsidiary, Central West Virginia Energy Company, and Mountain State Carbon and Wheeling Pittsburgh Steel, now collectively known as Severstal Wheeling, Inc.
Severstal acquired Wheeling Pittsburgh Steel and the remaining 50 per cent ownership of the joint venture Mountain State Carbon as part of its acquisition of Esmark, Inc, completed in August 2008. As such, the award payment will be made to the applicable business units of OAO Severstal.
''We're pleased to have closure in this matter. It's been a long process as the case has made its way through the trial and appellate courts. The decision by the US supreme court to end the appeals process, and allow the original jury award to stand, clearly validates the merits of the case and the substantial efforts of employees and advisors in fighting for a just result,'' Marty Szymanski, vice president and general counsel of Severstal North America, said.
OAO Severstal is listed on the Russian Trading System and the London Stock Exchange. A vertically integrated steel company, Severstal produced 17.5 million tons of steel. It had revenues of $15.2 billion in 2007.
