ISLAMABAD: M/s Hub Power Company (Hubo) has demanded Central Power Purchasing Agency –Guaranteed (CPPA-G) to pay Rs 13.47 billion which includes interest matured through arbitration.
In a letter to Chief Executive Officer (CEO) CPPA-G Rihan Akhtar, Chief Executive Officer (CEO) Hub Power Company, Kamran Kamal referred to the award approved by former Chief Justice Nasir ul Mulk in arbitration proceedings between Hub Power Company Limited and CPPA-G.
According to CEO Hubco, the Sole Arbitrator issued notice to the parties under Section 14 of the Arbitration Act 1940 on November 23, 2023 notifying the parties to appear on November 29, 2023 for release of the Award on which the Award was released to the parties in Islamabad.
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The Award is in favour of Hubco and requires CPPA-G to pay awarded amount to Hubco.
The arbitration proceedings took place under the Arbitration Act 1940. The First Schedule to the Arbitration Act sets out the implied conditions of arbitration agreements. Paragraph 7 of the First Schedule states that, “the award shall be final and binding on the parties and persons claiming under them, respectively.”
The Award is final and binding on the parties, said Kamran Kamal.
The first fill amounts were explicitly excluded from the receivables to be paid under the Power Purchase Agreement (PPA) Amendment Agreement of February 11, 2021 at the request of the Government. The parties agreed in the Master Agreement of the same date for resolution of this matter through arbitration.
Hubco agreed to remove the first fill amount from the receivables to be paid under the PPA Amendment Agreement on the understanding that if the arbitration decided in favour of Hubco, any awarded amounts would be settled immediately.
In the Award, the Arbitrator ruled that the adjustment by CPPA-G was unlawful and the adjusted amount plus interest and costs are payable to Hubco.
Accordingly, sums stipulated as payable to Hubco in the Award are due for immediate payment and the Government and CPPA-G must ensure such payment.
CEO Hubco requested CPPA-G to pay all amounts due to Hubco under the Award forthwith. These amounts comprise of: (i) an amount of Rs 11,525,141,609; (ii) interest calculated in accordance with the Award; and (iii) costs of Rs. 1,297,924. As at December 6, 2023, the interest calculation in accordance with the Award comes to Rs. 13,473,270,175.
CEO Hubco argued that the company reserves all its rights regarding the decision including rights against the government of Pakistan as guarantee.
Copyright Business Recorder, 2023
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