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RISK FACTORS
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4.3 Legal risks
4.3.2.6.
EARLY TERMINATION CLAUSES
The group enters into contracts which sometimes include clauses allowing the
customer to terminate the contract or reject the equipment if contract clauses
concerning schedule or performance have not been met. Difficulties concerning
products and services provided under this type of contract could thus result in
unexpected costs.
In addition to the above-mentioned negative financial consequences, contract
performance difficulties could harm the group’s reputation with existing or potential
customers, particularly in the nuclear sector.
4.3.2.7.
REQUIREMENTS CONTRACTS
Some contracts signed by entities of the group, in particular in the Chemistry-
Enrichment Business Unit, are for variable quantities, depending on our customers’
reactor requirements. These are known as “requirements contracts”.
The estimates provided by AREVA’s customers in connection with these contracts
may therefore be revised downwards in certain circumstances, with a corresponding
reduction in the revenue anticipated by AREVA for the contracts in question.
4.3.3.
RISKS AND DISPUTES INVOLVING AREVA
AREVA is exposed to the risk of disputes that could lead to civil and/or criminal
penalties. AREVA cannot guarantee that it is not potentially exposed to claims or
investigations that could have a significant unfavorable impact on the group’s image
and financial performance.
4.3.3.1.
OLKILUOTO 3 EPR POWER PLANT (OL3)
On December 5, 2008, the AREVA-Siemens consortium initiated arbitration
proceedings with the International Court of Arbitration (ICC) for delays and
disruptions suffered in connection with contract performance and for the resulting
additional costs incurred (“D&D Claim”). In July 2012, the court of arbitration
rendered a final partial decision enjoining TVO to release 100 million euros plus
interest due to the AREVA-Siemens consortium and withheld in contravention of
the contractual provisions. That decision was duly executed by TVO.
As of the end of 2016, on the legal level, the pre-trial investigation phase of the
legal proceeding begun in 2008 between the AREVA-Siemens consortium and
TVO continues. The AREVA-Siemens consortium continues to exercise its rights
in connection with the arbitration proceedings.
The consortium’s claim for compensation for damages concerns a total amount
of 3.5 billion euros. TVO’s claim against the consortium amounts to approximately
2.3 billion euros.
In accordance with the schedule of the arbitration proceeding, a partial decision was
rendered by the court on November 7, 2016. While that decision allows some of
TVO’s claims, it does not necessarily constitute a decision on the financial outcome
of the dispute between the parties. Other intermediate decisions are expected before
the final decision, not expected before the end of 2017 or early 2018.
In addition, the consortium and its counsel still believe that the allegations of
intentional gross negligence set out by TVO in its claim against the consortium
remain unjustified.
Concerning the OL3 project, the reader is invited to peruse the detailed information
given in note 24.
Provisions for losses at completion
of Section 20.2.
Notes to the
consolidated financial statements
of this Reference Document.
4.3.3.2.
RISKS OF DISPUTES RELATED TO ANOMALIES
IDENTIFIED IN THE MANUFACTURING PROCESS
OF CERTAIN COMPONENT FORGINGS AT CREUSOT
Following the announcement in late April that documentary anomalies had been
found in the follow-up of equipment manufacturing processes at the Creusot plant,
an audit is currently being conducted of all of the manufacturing files.
In October 2016, Greenpeace and other associations filed a complaint against
EDF and AREVA with the public prosecutor’s office of the High Court of Paris
concerning these anomalies, in particular those affecting a steam generator of
Fessenheim unit 2.
In addition, in October 2016, pursuant to article 40 of the French Code of Criminal
Procedure under which any established authority and any publicly appointed official
or civil servant with knowledge of a felony or a misdemeanor within the framework
of his/her functions is required to “advise the State Prosecutor without delay”, the
Chairman of ASN referred the matter of “irregularities” in the part manufacturing
files at AREVA NP’s Creusot plant to the State Prosecutor. According to a judicial
source, a preliminary investigation has been opened by the public health section
of the public prosecutor’s office of Paris pursuant to this referral.
To date, the analyses have found that no reported anomaly compromises the
mechanical integrity of the parts concerned. Additional tests and analyses are in
progress, in particular on an equipment item delivered to the Fessenheim 2 power
plant, in order to respond to requests from the nuclear safety authority ASN following
the suspension of the test certificate of one of the steam generators.
A more extensive analysis of the manufacturing files (unmarked files) is in progress
and concerns more than 6,000 files. Additional identified anomalies are being dealt
with in the same way. In this regard, an anomaly on a steam generator delivered to
the Flamanville 3 site was the subject of characterization for purposes of responding
to requests from the safety authority. This situation could result in other civil or penal
implications, both in France and abroad.
Concerning the anomalies identified at le Creusot and related subjects, the reader
is invited to also peruse the detailed information given in Section 9.1.
Overview
and in note1 of Section 20.2.
Notes to the consolidated financial statements
of this
Reference Document.
4.3.3.3.
URAMIN ACQUISITION
Following the preliminary inquiry led by the French national financial prosecutor’s
office, two judicial inquiries against persons unknown were opened concerning
the conditions of the acquisition of UraMin on the one hand, and the presentation
of the company’s financial statements from 2009 to 2012 relative to this purchase
on the other hand.
In response to the subpoena received from the court in December 2015, AREVA
brought an independent action for damages in connection with the investigation
of the UraMin acquisition.
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2016 AREVA
REFERENCE DOCUMENT