Legal Battles Escalate for Duro Felguera
Duro Felguera, the Asturian engineering firm, is currently navigating a tumultuous phase marked by an array of legal disputes as it approaches the conclusion of a strenuous restructuring process. The company is grappling with complications arising in Romania, Morocco, and the United Arab Emirates, all of which are intensifying the financial strain on its operations as it seeks to avert bankruptcy by 2025. In Romania, the complications stem from the Iernut combined cycle power plant project, where a Gijón court has accepted a lawsuit filed by ZKL Invest. This company issued one of the guarantees for the project, alleging fraud. The ongoing conflict revolves around the execution of these guarantees, and although the judicial process is still in its infancy, the judge has opened investigations without yet determining if a crime has occurred. Duro Felguera maintains that this issue falls within the realm of typical contractual disputes for such projects and is confident that it will remain a civil matter with no significant repercussions for its financial statements.
Complications in the UAE and Morocco
The situation is notably more complex in the United Arab Emirates, where the Jebel Ali gas project has led to a tangled web of interconnected lawsuits with varying outcomes. Duro Felguera asserts that the guarantees were improperly executed by its client, the public utility DEWA. Following years of contention, the company secured a favorable ruling from the Dubai Court of Cassation in November 2025, entitling it to recover over 15 million euros, plus interest. However, this ruling is still subject to partial appeals, and Duro Felguera has not included this amount in its financial accounts, deeming the recovery uncertain. Complicating matters further, when the guarantees were executed, the Dubai Islamic Bank, which backed them, advanced the funds. The Emirati bank has subsequently demanded repayment from Duro Felguera, resulting in a simultaneous recovery effort by the bank while the Spanish firm seeks restitution from DEWA. A ruling issued on March 24 in Dubai ordered Duro Felguera to pay approximately 39 million euros, a figure that directly impacts its financials, compelling the company to fully provision this amount in its accounts. Concurrently, legal proceedings in Gijón regarding these same guarantees remain suspended, pending a definitive resolution from the UAE courts. In Morocco, Duro Felguera has initiated arbitration against Aya Gold & Silver for unpaid invoices totaling over 1.3 million euros, alongside claims for an execution bonus of 2 million euros and additional compensations. Aya Gold has countered with a claim of its own, leading to a cross-arbitration that is expected to unfold throughout 2026. In light of these developments, Duro Felguera has exercised caution by adjusting its financial forecasts for the project, limiting revenue recognition to amounts actually received, and setting aside provisions of 8 million euros to cover potential risks, including outstanding costs and executed guarantees.
Moreover, Duro Felguera is also contending with a notorious corruption case linked to alleged bribery in Venezuela, which poses significant reputational risks. The National Court has scheduled the trial against former executives of Duro Felguera for October 19, with additional sessions planned for the following days. This case, stemming from events dating back to the late 2000s, revolves around purported payments exceeding 100 million dollars to Venezuelan officials to secure a contract for the construction of a thermoelectric plant valued at approximately 1.5 billion dollars. The Anticorruption Prosecutor's Office is seeking a fine of up to 160 million euros for Duro Felguera, along with a two-year ban on public sector contracts and access to tax benefits. While these events took place in Venezuela, the trial will occur in Spain due to the involvement of Spanish company executives and potential international corruption offenses. Duro Felguera remains optimistic about a favorable outcome and has not made any provisions related to this case.
In addition to these pressing issues, the company is also dealing with other significant ongoing procedures that may impact its future. Duro Felguera is engaged in a dispute with the National Commission on Markets and Competition (CNMC), which imposed a fine of 1.3 million euros in 2019 for market practices in industrial assembly. The company has appealed this decision, which is currently suspended while awaiting a ruling from the Supreme Court on essential issues related to the prescription of such infractions. In this instance, the company has maintained a limited provision of 0.5 million euros. Furthermore, Duro Felguera continues to face several high-stakes arbitrations internationally, including a dispute in Algeria over the Djelfa project, where claims exceed 349 million euros, contrasted with its own demand for 280 million euros. In Chile, the arbitration concerning the Aconcagua project has resulted in a net negative outcome for the company, leading to a provision of 18.6 million euros. Additionally, in Costa Rica, the firm is pursuing multiple claims against its client Recope regarding cost overruns and contractual modifications, with unresolved amounts and a judicial timeline extending into at least 2027. Other conflicts, such as the Covatillas project in Spain, have been resolved through agreements within the bankruptcy framework, with impacts already recognized in prior financial periods.
As reported by vozpopuli.com.
