MONITORING DESK

Karachi: The London Court of International Arbitration (LCIA) has issued final award in the arbitration between 9 IPPs and NTDC, directing to pay more than 14 billion rupees to nine independent power producers (IPPs) who moved the arbitration before this court once NTDC failed to implement the expert determination within 75 days from the date of expert award.

The arbitrator first issued a final partial award according to which expert award became final and binding because of the failure of NTDC to implement the expert award or move before the arbitration within stipulated time period of 75 days. In this final award arbitrator determined the specific amounts which has to be paid to 9 IPPs and till that payment interest @ of Kibor + 4.5% will also be admissible to IPPs.

The nine companies in the case were  (i) Atlas Power Limited, (ii) Liberty Power Tech Limited, (iii) Nishat Chunian Power Limited, (iv) Nishat Power Limited, (v) The Hub Power Company Limited, (vi) Saif Power Limited (vii) Orient Power Company (Pvt.) Limited, (viii) Sapphire Electric Company Limited and (ix) Halmore Power Generation Company Limited.

For the reasons set out in this Final Award, rejecting all submissions, arguments and requests to the contrary and resolving finally all claims and defences in this Arbitration, the court ordered the respondent to pay the claimants PKR 10.977 billion rupees pursuant to the Expert Determination; PKR 2.547 billion as pre-award interest in respect of expert determination; PKR 82.82 million for breach of the arbitration agreements; PKR 15.16 million and USD 5.51 million constituting the Claimants’ costs of the proceedings; GBP 271,417 constituting the Claimants’ LCIA costs of the Arbitration; interest on all amounts awarded to the Claimants at KIBOR + 4.5%, compounded semi-annually, from the date of the Final Award (being, 29 October 2017) and until full payment of these amounts by the Respondent.

Power producers used the LCIA as last resort due to purported failure of NTDC and its guarantor, the government to make payment and resolve capacity deduction issue. IPPs invoked the Supreme Court’s jurisdiction under Article 184 (3) in 2012 and the court directed NTDC to pay the outstanding amount but NTDC cleared only some amount and signed a memorandum of understanding (MoU) with IPPs and GOP to resolve all issues through invoking the dispute resolution mechanism set out in the PPAs.

As an expert, former Justice Sair Ali ruled that NTDC’s commitment to pay within 30 days must precede IPPs’ obligation to maintain a 30-day inventory and deductions by the NTDC were unauthorized.—Courtesy Mettis Global News