Dispute over contractual quantities’ non-offtake: LCIA delivers its arbitral award in favour of SNGPL
- Significant portion of the related litigation and arbitration costs will be borne by QATPL
KARACHI: The London Court of International Arbitration (LCIA) has delivered its arbitral award in favour of Sui Northern Gas Pipelines Limited validating SNGPL claims against Quaid e Azam Thermal Power (Private) Limited (QATPL) on account of failure to offtake the Take or Pay quantities of RLNG by QATPL.
According to the material information sent to the Pakistan Stock Exchange on Friday, a dispute between Quaid e Azam Thermal Power (Private) Limited (QATPL) and SNGPL regarding the non-offtake of the Take or Pay (contractual quantities) of RLNG by QATPL was pending in the London Court of International Arbitration ((LCIA).
The LCIA Arbitrator has now delivered its arbitral award in favour of SNGPL validating SNGPL claims against QATPL on account of failure to offtake the Take or Pay quantities by QATPL.
The significant portion of the related litigation and arbitration costs are also held to be borne by QATPL.
The Arbitrator has further held that SNGPL has rightfully en-cashed the security deposits held by it and has directed the QATPL to replenish the same as per the contractual requirements.
It is pertinent to mention that under the terms of the license granted to SNGPL by Ogra read with the decision of ECC and in line with the tariff regime in vogue, the arbitral award under discussion will not impact the profitability of the Company as the revenues billed to QATPL have already been treated as an Operating Revenues, it added.
Copyright Business Recorder, 2022
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