NIIK intends to recover damages from Metafrax

Shareholder of the Research and Design Institute for Urea and Organic Synthesis Products (NIIK, the city of Dzerzhinsk, the region of Nizhny Novgorod) Yuri Yavorsky intends to file a class-action lawsuit to invalidate the contract with Metafrax Chemicals (hereinafter, Metafrax) in terms on the price of work and the recovery of damages.

In 2017, NIIK signed an agreement with Metafrax on the design and construction of the Ammonia-Carbamide-Melamine complex, however, in 2021, Metafrax terminated the contract and NIIK suffered losses estimated at 1.5 billion rubles (almost $19 million).

NIIK is currently suing Metafrax and Sberbank to invalidate claims for payments under bank guarantees filed by Metafrax for the total amount of 745 million rubles (approximately $9.4 million). These guarantees are related to the obligations of NIIK under the project of the Ammonia-Carbamide-Melamine complex.

The complex should have produced up to 575 thousand tons of carbamide, 308 thousand tons of ammonia and 40 thousand tons of melamine per year.