Saipem has been unsuccessful in its appeal against an Algerian court ruling that upheld an earlier verdict that sentenced two former employees to imprisonment and imposed fines and damages on the Italian contracting giant relating to alleged graft for an historic tender for the GNL3 Arzew liquefied natural gas project in Algeria.

The Algerian Supreme Court this week rejected Saipem’s appeal presented by all the defendants against the decision made four months prior by the nation’s Appeal Court.

The Italian company on Friday said that the parent company Saipem SpA, Saipem Contracting Algerie and Snamprogetti SpA Algeria Branch reserve the right to challenge the Supreme Court’s decision.

The Algiers Court of Appeal in late June had ruled in the criminal proceedings ongoing since 2019 in the North African nation, connected, inter alia, to the 2008 tender for the GNL3 Arzew project.

Saipem 14 years ago won the contract to build a 4.7 million tonnes per annum liquefaction train for the GNL3 Arzew project, and construction was completed in 2012.

The contractor reiterated that the Italian judiciary authority - further to criminal proceedings in which the process of award in 2008 of the project GNL3 Arzew had been analysed – fully acquitted it in December 2020.

However, the Algerian criminal proceedings saw Saipem, Saipem Contracting Algerie and Snamprogetti Algeria Branch charged, in accordance with national law, of allegedly “having obtained a contract, with a price higher than the correct value, concluded with a state-owned commercial and industrial company, benefitting of the influence of representatives of that company”; and of “false custom declarations”.

The Tribunal of Algiers sentenced two former employees of Saipem Group — the-then head of the GNL3 Arzew project and a former Algerian employee — to five years and six years of imprisonment, respectively. Another employee of Saipem Group was acquitted of all charges.

This ruling also imposed total fines and damages of approximately €199 million ($205.5 million) on the three companies – comprising some €60 million in fines and around €139 million in favour of civil parties.

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