London court directs NTDC to pay Rs14b to power producers

Power Division, however, argues the issue is still under litigation in Pakistan

LAHORE: The London Court of International Arbitration has ordered the National Transmission and Despatch Company (NTDC) to pay around Rs14 billion to nine independent power producers (IPPs), including outstanding bills and interest payments, in a case of delay in clearing capacity charges.

The arbitrator issued a final partial award because NTDC had failed to implement the earlier expert award or move the arbitration court within the stipulated time period of 75 days.

According to industry players, the IPPs approached the international court as a last resort because of continuous failure of NTDC and its guarantor, the government, to make payments and resolve the capacity charges deduction issue.



Earlier in 2012, the IPPs went to the Supreme Court, which directed NTDC to pay the outstanding amount. However, NTDC made some payments and signed a memorandum of understanding with the IPPs and the government for resolving all issues through the dispute resolution mechanism set out in the power purchase agreements.

As an expert, former Justice Sair Ali had ruled that NTDC’s commitment to paying within 30 days must precede the IPPs’ obligation to maintain 30-day inventory and deductions made by NTDC were unauthorised.

Power Division’s version

A spokesman for the Power Division, while responding to the order of the London Court of International Arbitration, said the expert determination on which basis the award was announced was still under litigation in the high court in Pakistan besides a separate case was being heard in the civil court. He pointed out that NTDC took the plea that the expert determination was under litigation and suspended by an appropriate court, therefore, the award should not be based on it.



“NTDC has already challenged the partial final award issued in June 2017 and this award is in continuation of the same; NTDC has the legal right to challenge this award,” he said. Keeping in view the above facts, the spokesman emphasised, the government was thoroughly examining the award and would exhaust all available options to defend the case.

Published in The Express Tribune, November 1^st, 2017.

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