Russia: New joint venture may settle quartz glass dispute

America“s ambassador to Russia proposed formation of a joint venture to settle a dispute between America“s Sawyer and Russia“s Factory for Especially Pure Quartz Glass from Gus-Khrustalny in Vladim…

America“s ambassador to Russia proposed formation of a joint venture to settle a dispute between America“s Sawyer and Russia“s Factory for Especially Pure Quartz Glass from Gus-Khrustalny in Vladimir region. At a news conference in Vladimir on 16 July, Ambassador to Russia Alexander Vershbow said his visit was aimed at settling the dispute, which arose over the American company“s agreement to rent Quartz Glass properties. Sawyer signed a lease agreement with Quartz Glass on 15 September 1997 giving it the right to rent the properties for 25 years with an option to purchase at the end of the period. Arbitration court in Vladimir region and federal arbitration court in Volgo-Vyatsky district have since declared the agreement null and void. Sawyer claims it has invested over US$ 8 million in Vladimir region since 1997 and organized production of high-quality quartz for the electronics industry. However, production of Sawyer“s Russian subsidiary, Russian Quartz from Gus-Khrustalny, has been halted. Vershbow said Sawyer would file suit in Supreme Arbitration Court and in international court for damages if production is not restarted. However, the litigation process will take at least 18 months to two years, he said. Instead, he proposed creation of a joint venture between Sawyer and Quartz Glass. Sawyer wants to see production resume because the operation is generating US$ 3 million a year in revenues. Production was halted in June 2001 following the ruling from Vladimir arbitration court. The Russian side is also unable to manufacture product since an arbitration court ruling this year ordered it to return vital equipment supplied by Sawyer. The American embassy and the Ministry of Economic Development are currently discussing the matter, he said.