ISLAMABAD: Private Power & Infrastructure Board (PPIB) has rejected demand for payment of M/s Star Hydro Power Limited, saying that their notice is not in accordance with the law.
In a letter to CEO Star Hydro Power Limited, Bong Rok Oh, PPIB stated that the guarantee, amongst others, stipulates that the GoP is obligated to pay to the company any and every sum of money the power purchaser is obligated to pay to the company under or pursuant to the Power Purchase Agreement (PPA) that the power purchaser has failed to pay when due in accordance with the terms of that agreement (the Guaranteed Obligation).
According to PPIB, any demand for payment under the Guarantee is required to be made strictly in accordance with the terms and conditions of the Guarantee which, amongst others, required that the company prior to making such demand under the Guarantee, shall serve a notice under Section 1.5.1 thereof notifying the GoP in writing that payment from the power purchaser continues to be past due, and make a demand for payment from the GoP under the guarantee after thirty days from the date of notice of such non-payment was delivered to GoP. The GoP then shall make payment within ten business days following such demand for payment.
PPIB maintains that on the other hand, in contravention of the express provisions of the Guarantee, the Company in its letter on July 07, 2022 served a notice purportedly under Section 1.5.1 of the Guarantee in which it notified the GoP of non-payment by the power purchaser of amounts under a purported arbitral award dated May 18, 2022 rendered in an arbitration under the auspices of London Court of Arbitration (LCIA).
The PPIB has maintained that now the demand for payment under the Guarantee by the Company in its letter of August 15, 2022 following rejection of its notice under Section 1.5.1, being in contravention to, untenable, invalid and unlawful, not only in terms of the Guarantee but also under the applicable Laws of Pakistan cannot be entertained and is rejected.
PPIB said that it took this position without prejudice to any rights and remedies available to PPIB/ GoP against the Company, including but not limited to raise further or more objections or grounds, under the Implementation Agreement dated November 30, 2011 executed by and between the Company and the GoP (GOPIA), the Guarantee or applicable laws of Pakistan, whenever and wherever required, which rights are expressly reserved.
Copyright Business Recorder, 2022
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