Solar power project: LCIA dismisses Zonergy's claim against CPPA-G

Central Power Purchasing Agency (CPPA-G) and three subsidiaries of Zonergy Company Limited (Zonergy) approached the London Court of International Arbitration (LCIA) earlier this year to agitate their disputes under three identical energy purchase agreements (EPAs) signed between CPPA-G and the subsidiaries of Zonergy on June 26, 2015 to set up 3x100 MW solar power projects (IPPs).

According to a press release of issued by Power Division the disputes between the parties related to a delay by the 3x100 MW solar power projects in achieving the Commercial Operations Date (COD) by the Required Commercial Operations Date (RCOD), as agreed under their respective EPAs, and the imposition of liquidated damages for the delay, as provided under their respective EPAs, by CPPA-G, says a press release issued here.

The final hearing for the LCIA arbitration nos. 183881, 183884 and 183885 initiated by the IPPs took place from April 29, 2019 to May 3, 2019 in Islamabad. The sole arbitrator appointed by the LCIA issued his final awards in the LCIA arbitration nos. 183881, 183884 and 183885 on November 19, 2019.

In the determination of the disputes between the parties, the sole arbitrator decided that the RCOD, as agreed between the parties under the respective EPAs, represented a valid and binding obligation. Consequently, CPPA-G's imposition of liquidated damages for the power projects' delay in achieving COD by RCOD was justified. Further, the sole arbitrator also determined that the identical liquidated damages provision in the EPAs was legal and enforceable. Consequently, the sole arbitrator dismissed the entire claim raised against CPPA-G by the subsidiaries of Zonergy.

CPPA-G was represented in the LCIA Arbitration Nos. 183881, 183884 and 183885 by 'Cornelius, Lane & Mufti, advocates & Solicitors' ("CLM"). The team from CLM consisted of Barrister Munawar-us-Salam (Advocate Supreme Court), Barrister Waleed Khalid (Advocate High Court), Adil Umar Bandial (Advocate High Court), Ahmed Tariq (Advocate) and Amna Salam (Advocate).-PR