ISLAMABAD: Pakistan State Oil (PSO) has won an arbitration case against global LNG trader Gunvor Group Limited pertaining to excess payments for natural gas shipments.
The London Court of International Arbitration gave a verdict in favour of Pakistan’s PSO which had reduced payments to Gunvor due to overcharged shipments.
The company was awarded $14.6 million and other costs as per contract on October 8 for the case initiated by Gunvor in January 2021.
The PSO continued making excess payments to Gunvor on account of port charges for four and a half years. Later, the PLL management pointed out that Gunvor was receiving excess payments from it. Following this, a legal opinion was sought from an international firm that had assisted the Pakistani firms in finalising the LNG supplies agreement with Gunvor. Upon availability of the final port charges, the PLL promptly notified Gunvor on November 9, 2018, of its concerns regarding the calculations applied by Gunvor in provisional invoices.
Energy crisis: Pakistan fails to secure LNG contract
The PLL again reached out to Gunvor on August 10, 2020, with a view to resolving this issue. After the PLL management had identified the excess payments Gunvor was receiving, the PSO deducted the excess payment. Subsequently, Gunvor filed a case against the PSO in an international court.
The PSO had a supply contract for five years with Gunvor that expired in December 2020. The PLL has also a five-year agreement with Gunvor for the LNG supply that expired in December 2021.
Officials said the PSO had a rule to blacklist any company that is involved in litigation with it. Now, Gunvor has filed a case in the international court and the PSO is likely to blacklist this firm.
Copyright Business Recorder, 2022
Comments
Comments are closed for this article.