Grupa Azoty Puławy sues Polimex-Mostostal over construction delays and financial discrepancies

Grupa Azoty Puławy has initiated legal action against Polimex-Mostostal, filing a lawsuit in the District Court of Lublin on December 23, 2024. The claim centers around the consortium’s failure to complete a coal-fired unit on schedule, demanding PLN 249.2 million ($57.31 million) in liquidated damages. The damages relate to missed deadlines for key project milestones, including the synchronization of the unit with the National Power System and the signing of the Acceptance Protocol for Operation.

The lawsuit also contests the consortium’s demands for a payment guarantee, which Grupa Azoty Puławy argues exceeds the actual value of the construction work, capped at PLN 2.3 million ($529,000). Furthermore, the company seeks judicial confirmation that the consortium had no basis to terminate the contract, a decision they made citing alleged issues with the payment guarantee.

The principal amount claimed in the lawsuit is PLN 243 million ($55.89 million), supplemented by PLN 6.2 million ($1.43 million) in interest accrued due to late payment. This financial claim reflects the extensive delays in the project, which began on October 23, 2019, with an original completion deadline of October 23, 2022. Despite subsequent extensions, the project remains unfinished, with the current delay totaling 792 days and project expenses exceeding PLN 1.1 billion ($253 million).

Grupa Azoty Puławy previously responded to a demand for a PLN 189 million ($43.47 million) payment guarantee by providing PLN 2.3 million ($529,000) to cover ongoing construction work. On December 6, 2024, the court granted an injunction favoring Grupa Azoty Puławy, limiting the required guarantee amount to PLN 2.3 million ($529,000) and suspending any obligation beyond this figure. Despite this, the consortium terminated the contract, which Grupa Azoty Puławy claims was an attempt to evade paying the liquidated damages.