Russia’s Foreign Ministry

warned Nigeria last Thursday of potential damage to bilateral relations and urged action against a court decision that stripped the world’s largest aluminium producer, Rusal, of its core African asset.

The Supreme Court ordered last week that Rusal, which owns 85 per cent of the formerly state-run Aluminium Smelter Company of Nigeria, should cede its ownership, because the assets should have gone to another bidder, United States-based BFI Group, when ALSCON was privatised five years ago, The Tide source reports.

Rusal said the ruling was against the Bureau of Public Enterprise, which handled the privatisation and gave it the green light to acquire the stake for $205m in 2007. The decision would thus not affect its ownership of ALSCON, the company said.

The ministry said in a statement on its website, www.mid.ru, “The ruling could … to a significant extent, undermine Russian-Nigerian investment, economic cooperation and incur negative consequences for the whole scope of bilateral ties.

“We urge the Nigerian government to take the necessary actions in order to prevent potential damage to the existing fruitful and mutually beneficial relations.”

BFI, headed by American-Nigerian, Reuben Jaja, took BPE to court, saying the agency breached its contract.

The Supreme Court ruling last week ordered BPE to revert to the original preferred bidder, BFI Group, to pay the agreed price of $410m for ALSCON.

Oleg Deripaska, the controlling shareholder of Rusal, is a billionaire who has long enjoyed close ties with the Kremlin. The aluminium giant received billions of dollars in state bail-out funds after the 2008 global financial crash.

ALSCON is one of Rusal’s key African assets with annual project capacity of 120,000 tonnes; however, its operations have been hampered by regular electricity cuts allowing ALSCON to produce only 15,000 tonnes of aluminium last year, a company spokeswoman said.

“There is no evidence on record that Rusal has taken possession of ALSCON,” Justice John Fabiyi said in the lead judgment, according to The Tide source.

“The appellant’s (BFI Group) bid in the sum of $410m was preferred by the respondent. The appellant was declared winner at the auction sale conducted on June 14, 2004.”

However, Rusal said on Monday the ruling was between BPE and BFI Group and it would retain its shares in ALSCON.

“(The) ruling of Nigeria’s Supreme Court neither does change, nor can change the owner of ALSCON shares belonging to UC Rusal,” a company spokeswoman told The Tide source  on Monday.

“This litigation relates to claims of BFI Group to BPE of Nigeria, which means that it is Nigerian government to bear responsibility for such ruling and that it cannot have effect on Rusal’s ownership of ALSCON shares.”

This means as far as Rusal is concerned, it still owns 85 per cent of ALSCON and the ruling is against BPE, a government agency, and not the Russian company.

A spokesman for BPE said on Monday the agency would wait until it received the judgment before making further comments, but they would adhere to any ruling passed by the court.