TVO gains further award in Olkiluoto arbitration

20 July 2017

Finnish utility Teollisuuden Voima Oyj (TVO) has been awarded a second final and binding partial award in the ongoing arbitration proceedings related to delays in the construction of the first-of-a-kind EPR unit at Olkiluoto. It follows the granting of a partial award to TVO last November.

Olkiluoto 3 - August 2016 - 460 (TVO)
The Olkiluoto EPR, pictured in August 2016 (Image: TVO)

The Areva-Siemens consortium began construction of Olkiluoto 3 in 2005 under a turnkey contract signed with TVO in late 2003. Completion of the 1600 MWe reactor was originally scheduled for 2009, but the project has suffered various delays and setbacks.

The ongoing arbitration proceedings through the International Chamber of Commerce (ICC) were initiated by the supplier consortium in December 2008. In 2012, TVO made a claim against the Areva-Siemens consortium under the arbitration proceedings. Both parties have since made a number of revisions to their respective claims. TVO maintains that, as Olkiluoto 3 is being built under a fixed-price turnkey contract, the supplier consortium companies are "jointly and severally liable for the plant contract obligations". However, Areva-Siemens claims that TVO has itself caused some delays to the plant's construction.

In November 2016, TVO announced it had received a final and binding partial award in which the ICC had "addressed the early period of the project", including the timescale, licensing and licensability, and system design.

TVO announced today that the ICC tribunal had granted it a further partial award after it addressed the preparation, review, submittal and approval of design and licensing documents related to the Olkiluoto 3 project. The company said this partial award "finally resolved the great majority of the facts and matters in favour of TVO. Conversely, it has also rejected the great majority of the supplier's contentions in this regard".

According to TVO, the latest partial award - which does not take a position on the claimed monetary amounts - "has conclusively rejected the analytical method used by the supplier to support its principal monetary claims against TVO".

TVO noted the arbitration proceeding is ongoing and that at least one further partial award will be made before the ICC makes its final award, which will declare the liabilities of the parties to pay compensation.

In a statement, Areva said it will study the ruling. The company said, "It does not address the amounts of the reciprocal claims made by Areva/Siemens and by TVO, nor does it rule on on all the key issues of the arbitration. The final decision by the ICC is still awaited in early 2018."

According to the latest schedule provided by the Areva-Siemens consortium in September 2014, regular electricity production in the unit will commence at the end of 2018. Cold functional tests of the reactor's primary circuit - an important step in plant commissioning - began last month, with hot functional tests scheduled for later this year.

Researched and written
by World Nuclear News