ISLAMABAD: The Private Power Infrastructure Board (PPIB) has approved the name of law firm M/s Howard Kennedy for representing the government of Pakistan in LCIA Arbitration in M/s Star Hydropower Limited (SHPL) case, sources close to the MD of PPIB told Business Recorder.
The fee of law firm will be £230,000 whereas fee of barrister will be finalized by the Attorney General Office, the sources added.
Recently, MD PPIB, Shah Jahan Mirza apprised the Board that Star Hydro Power Limited (SHPL) and NTDC entered into dispute over delay in installation of Power Purchaser Inter-Connection Facility by NTDC.
Both parties filed counter arbitral claims against each other before LCIA, wherein NTDC's claim was dismissed and it was found in breach of terms of PPA in making payment of liquidated damages. Thereafter, SHPL filed case before Lahore High Court for enforcement of the Award, whereas NTDC as a counter strategy challenged the Award in Civil Court Lahore and both cases are pending before the respective Courts.
Meanwhile, SHPL raised demand for payment of Award from NTDC and CPPA-G, which was rejected by CPPA-G. Subsequently, SHPL served demand notice upon PPIB under section 1 .5.1 of Guarantee, which was rejected by PPIB on grounds that it was untenable under the applicable laws of Pakistan.
SHPL then intimated to PPIB/GOP that amounts due in pursuance of the Award 'continue to be past due' for more than 30 days and called upon the GOP to pay the due. The call on Guarantee, being untenable in law, was also rejected by PPIB and SHPL initiated LCIA arbitration.
MD PPIB further explained that PPIB as per Rules of Business 1973 forwarded the case to Attorney General for Pakistan (AGP) who decided to contest the arbitral claim and a foreign law firm was engaged in compliance of Standard Operating Procedures for engagement of foreign law firms on February 17, 2015 (SOPs).
In a meeting comprising of participants from office of AGP, Law Division, Power Division, PPIB, CPPA-G and NTDC recommended engagement of M/s Howard Kennedy, a London-based law firm, to represent the GOP. PPIB was directed by AGP and Power Division to sign engagement letter with the law firm. Considering urgency of the matter, MD PPIB signed engagement letter to enable the law firm to commence its services.
Representative Ministry of Finance expressed reservation that relevant rules regarding validity of ex post facto approval and procedure for hiring of law firm are not part of working paper. DG Law PPIB explained that foreign law firm has been engaged pursuant to "Standard Operating Procedures for engagement of foreign law firms on February 17, 2015" which are part of working paper and hiring was executed in compliance of said SOPs. A brief elaboration of SOPs was also narrated to the Board by DG Law, PPIB.
Details of charge out rates of law firm were also presented to the Board. MD PPIB revealed that Power Division was also requested to timely arrange funds from Ministry of Finance through supplementary grant. Representative MoF opined that arrangement of funds from MoF cannot be a decision of PPIB Board and the funds shall be arranged by PPIB from its own sources. The Board agreed that in case of non-availability of funds at PPIB, a formal request for supplementary grant will be submitted to MoF.
The Board also decided that all costs associated with the Guarantee Arbitration including fees payable to LCIA secretariat, M/s Howard Kennedy, Barrister (yet to be hired), as and when incurred, will be managed by PPIB and in case of non-availability of funds at PPIB; however, a formal request for supplementary grant will be submitted to MoF.
Copyright Business Recorder, 2023
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