January 5, 2026 11:32

Grupa Azoty Polyolefins has initiated arbitration proceedings against Hyundai Engineering, the project contractor for Polimery Police — the Polish facility for the production of propylene and polypropylene, inaugurated two years ago but still not operational.

The claim was filed with the Vienna International Arbitral Centre (VIAC) of the Austrian Federal Economic Chamber, where Hyundai Engineering had previously submitted its own claim against Grupa Azoty Polyolefins over the termination of the contract.

The dispute concerns the execution of the contract signed in May 2019 for the full-scale implementation of the Polimery Police project.

The claim submitted by Grupa Azoty Polyolefins includes demands for compensation totaling up to €2.98 billion, allegedly stemming from the contractor’s failure to fulfill its contractual obligations, which led to the project not being completed.
The statement of claim includes requests for the payment of contractual penalties due to delays in project execution and related to Grupa Azoty Polyolefins’ withdrawal from the contract for reasons deemed attributable to the contractor.
It also asks the arbitral tribunal to order Hyundai Engineering to remedy the defects in the works, materials, equipment and documentation supplied, or to replace them with defect-free items.

“We consistently maintain that the Polimery Police project was not completed within the agreed timeframe and for reasons attributable to the contractor, Hyundai Engineering. As a result, the company has incurred significant financial losses,” stated Andrzej Skolmowski, president of the management board of Grupa Azoty.
“In August, we informed the market about the rejection of the contractor’s claims, as well as about Grupa Azoty Polyolefins’ withdrawal from the contract for the comprehensive execution of the project for reasons attributable to the contractor, and about the imposition of contractual penalties,” added Skolmowski. “At the same time, we challenge the effectiveness of the contractor’s subsequent declaration of withdrawal from the same contract. In our assessment, there were no legal or factual grounds for such a declaration, particularly as at the time it was made the contract was no longer in force.”

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