Saipem to Challenge Algerian Court's Fine Ruling

Italy’s Saipem will appeal to the court of cassation against an Algerian court’s imposition of fine for allegedly inflating prices on contracts to build a gas pipeline.

The Algerian court ordered Saipem Contracting Algérie to pay a fine equivalent to approximately 34,000 euros ($37,104) for allegedly “inflating prices on contracts awarded by a public company engaged in industrial and commercial activities, taking advantage of the authority or influence of representatives of said company”, an offence punishable under Algerian law, Saipem said in a statement published Tuesday.

Algerian state energy firm Sonatrach awarded Saipem Contracting Algérie the contract to build a gas pipeline called GK3 in 2009.

The Italian firm said it will assess the reasons given by the court and will appeal to the court of cassation against the verdict, as it firmly believes no price inflation above market rates occurred. 

The court granted Saipem Contracting Algérie’s request to unfreeze two current bank accounts in local currency belonging to the company, which have been blocked since 2010 and hold the equivalent of around 82 million euros.

Saipem said Sonatrach had reserved the right to claim payment of damages it allegedly suffered in a separate civil proceeding, but no such claim had been presented so far.