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Stockholm court rejects lawsuit against Russian uranium trader-1

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(Adds Russian nuclear agency's quote, background in paras 3-8)

MOSCOW, June 13 (RIA Novosti) - The Stockholm Arbitration Court quashed Wednesday a lawsuit filed by a U.S. nuclear services company against Russian state-controlled nuclear fuel supplier Techsnabexport, an informed source reported.

Globe Nuclear Services and Supply Ltd. sought nearly $1 billion to compensate for an alleged breach of contractual obligations in uranium deliveries.

The Russian Agency for Nuclear Power later confirmed the court's decision to reject the GNSS lawsuit.

"We are aware of the decision made by the Stockholm [Arbitration] court," Sergei Novikov, a spokesman for the agency, said. "In addition, the court decided to charge GNSS $5 million in litigation costs."

The suit was initiated on 31 October 2003 when Techsnabexport announced that as of 1 January 2004 it would halt deliveries of uranium to GNSS being carried out under a deal to convert Russian high-enriched uranium to low-enriched uranium for power plants, known as the HEU-LEU agreement. The Russian nuclear fuel and services company insisted that the contract with GNSS contravened Russia's national interests.

Techsnabexport claimed that GNSS operations were non-transparent in terms of market distribution, end-users and quantities of the uranium allocated. It also claimed that the financial standing of GNSS was uncertain.

In retaliation, GNSS filed a suit with a U.S. circuit court to overrule Techsnabexport's decision to halt delivery of uranium and initiated legal proceedings in a Swedish arbitration court.

The HEU-LEU contract, also known as the Megatons to Megawatts agreement, was signed in February 1993 and expires in 2013. It aims to convert 500 metric tons of high-enriched uranium (HEU), enough to supply 20,000 nuclear warheads, from dismantled Russian nuclear weapons into low-enriched uranium (LEU), to be used in commercial reactors in the U.S.

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