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SHPL-NTDCL dispute: the government could hire an international company – Business & Finance

ISLAMABAD: Government is likely to hire an international firm to represent the Government of Pakistan (GoP) before the London Court of International Arbitration (LCIA) in a dispute with Star Hydro Power Limited (SHPL) and National Transmission and Despatch Company Limited (NTDCL), knowledgeable sources told Business Recorder.

In this regard, a meeting was held at the Attorney General’s Office on October 27, 2022, to discuss the way forward in the matter.

The participants recalled the final arbitration award rendered by the LCIA on May 18, 2022, under the Power Purchase Agreement (PPA) signed between Star Hydro Power Limited and NTDC (the first arbitration). Pursuant to a notice served on the GoP on August 30, 2022, that a dispute had arisen under the guarantee, the company has now submitted a Request for Arbitration (RFA) against Pakistan on September 30, 2022.

Participants also recalled the second arbitration instituted by the Company under the PPA, on August 31, 2021 concerning the determination of prices by Nepra (Second Arbitration).

In this regard, the Ministry of Energy (Energy Division), in Office Memorandum No. 10(80)/2021-IPP, had requested the opinion of this office, among other matters, on the points following: In the event that an amicable settlement through negotiation is not feasible or possible, should the GoP elect to participate and join in the second arbitration proceeding under the auspices of the LCIA, considering in accordance with Section 7.3 of the GoPIA?

Participants debated at length whether the GoP should participate in the second arbitration. Adil Sharif, DG-Law, Private Power and Infrastructure Board (PPIB), issued the preliminary view that the GoP should participate in the second arbitration. The representative of the GPPA and the Attorney General’s Office felt that it would be prudent to first seek legal advice from CAPP’s outside counsel, Mayer Brown LLP, in the second arbitration on the matter before proceeding. determine whether the GoP should become a party to the proceedings.

According to sources, regarding the warranty dispute in the first arbitration, the participants agreed that an external foreign law firm specializing in electricity sector disputes be engaged to represent the GoP in warranty dispute before the LCIA. The Attorney General’s Office and the PPIB are assisting the foreign law firm with the LCIA process.

In light of the discussions, the participants unanimously approved the following: (i) in accordance with the Standard Operating Procedures (SOPs) for Engaging Foreign Law Firms dated February 17, 2015, a foreign law firm shall be shortlisted and engaged to represent the GoP in the warranty dispute and (ii) the Attorney General’s office will obtain legal advice from Mayer Brown LLP on the matter described in paragraph 3. All expenses in this regard will be at ACPP-G load.

Copyright Business Recorder, 2022