Team off to UK for case filed by IPPs LAHORE: A three-member team of the ministry of water and power departed for the United Kingdom on Sunday to prepare along with the foreign counsel for proceedings initiated in the London Court of International Arbitration (LCIA) on the request of nine independent power producers (IPPs) for the recovery of their unpaid capacity payments from the National Transmission and Despatch Company (NTDCL).
The government team initially comprised Chief Executive Officer Abid Latif Lodhi, Deputy General Manager (Finance) Muhammad Shabbir, Chief Financial Officer Rihan Akhtar and Chief Legal Officer Abdul Majid Khan of the Central Power Purchasing Agency (CPPA), and lawyer Shiekh Muhammad Ali, but only three members were sent. The decision was taken in view of issues related to the recent shifting of the company’s head office to Islamabad from the Wapda House in Lahore.
“Due to shifting issues, the CPPA’s CEO and the DGM (Finance) cancelled their scheduled visit to the UK which was approved through a letter on Aug 11. Now the team consists of the CFO, CLO and the local lawyer only,” an official told Dawn.
The team will return on Sept 10 after holding meetings with the London-based lead counsel, he added.
The IPPs claiming recovery of Rs16 billion, including Rs5bn interest, are the Hub Power Company (Narowal), Sapphire Electric Company, Halmore Power Generation Company, Liberty Power Tech, Atlas Power, Nishat Chunian Power, Nishat Power, Orient Power and Saif Power.
According to an official document, the team will discuss with the lead counsel various applications the petitioners filed last year in the LCIA. These include the Hubco and others versus NTDCL, nine IPPs versus NTDCL and Atlas Power Limited versus NTDCL, carrying petition numbers LCIA 142730, 142751, 152981 to 152987 and 153142.
All the nine IPPs fall under the 2002 power policy.
“Actually the local arbitrator, retired Justice Sair Ali, had given a decision against us, declaring: ‘When the government failed to make payments to IPPs on time, how they could generate power under the contract.’ But the government’s point of view is that when it had already paid interest and penalty to the IPPs on delayed payments under the contractual obligations, why they didn’t produce the electricity in various timings,” the official said.
He said the ministry’s team had been asked to fight the case well, in close coordination with the foreign counsel. He said the CPPA’s CFO would also file a witness statement before the court in consultation with the lead counsel in the Atlas Power case.
The NTDCL had approached the LCIA in November last year to stop the arbitration proceedings on the basis of a stay order on the matter issued by a civil court in Pakistan on a petition filed by the ministry. The ministry had approached the local court after the arbitrator, a former Supreme Court judge, ruled in favour of the affected power producers on their dispute with the NTDCL over capacity payments in August last year.
The LCIA not only rejected the NTDCL’s request to stay the arbitration proceedings, but also ordered the power purchaser to withdraw its application from the court in Lahore. The arbitrator told the NTDCL not to take any step to disrupt the arbitration proceedings.