LAHORE: An international arbitration court awarded over Rs14 billion to nine independent power producers (IPPs) in Pakistan in a dispute on overdue claims with the National Transmission and Despatch Company (NTDC), sources said on Tuesday.
Sources said the London Court of International Arbitration issued final award on October 29 after the NTDC’s failure to comply with a partial award issued in June or move before the arbitration within 75 days.
Now, the court ordered the respondent to pay the claimant IPPs Rs10.977 billion pursuant to the expert determination; Rs2.547 billion as pre-award interest in respect of expert determination; Rs82.82 million for breach of the arbitration agreements; Rs15.16 million and $5.51 million constituting the claimants’ costs of the proceedings; 271,417 pound sterling constituting the claimants arbitration cost; interest on all amounts awarded to the claimants at Karachi interbank offered rate plus 4.5 percent, compounded semi-annually, from the date of the final award.
The nine IPPs involved in the case include Atlas Power Limited, Liberty Power Tech Limited, Nishat Chunian Power Limited, Nishat Power Limited, Hub Power Company Limited, Saif Power Limited, Orient Power Company (Pvt) Limited, Sapphire Electric Company Limited and Halmore Power Generation Company Limited.
An energy ministry’s spokesman said the expert determination on which basis the award was announced, is still under litigation in a high court and a civil court in Pakistan. The spokesman said NTDC has already challenged the partial final award and “the (latest) award is in continuation of the same and NTDC has the legal right to challenge this award.”
“We are thoroughly examining the award and will exhaust all available options to defend the case,” he added.
In 2015, IPPs moved to the London court after NTDC failed to clear their unpaid capacity and interest payments. The government also approached the court to halt the arbitration, but the appeal was rejected.
Earlier, IPPs invoked the Supreme Court’s jurisdiction to settle the issue and the court directed NTDC to pay the outstanding amount, but NTDC cleared only some amount and signed a memorandum of understanding with IPPs to resolve all issues through invoking the dispute resolution mechanism set out in the power purchase agreements.
Former Justice Sair Ali said NTDC's commitment to pay within 30 days must precede IPPs’ obligation to maintain a 30-day inventory and deductions by the NTDC were unauthorised. However, the Sair Ali’s verdict was not implemented and the IPPs had no option but to go to the London court, in which they sought that the expert determination would be declared final and binding as per the provisions of the PPAs.
Zafar Abbas, managing director of NTDC, said NTDC has nothing to do with this after incorporation of Central Power Purchasing Agency. The business has now been shifted to the market operator, he added.
