KARACHI: National Transmission and Despatch Company (NTDC) a companyfalling under the Ministry of Energy (Power Division) has prevailed in aninternational commercial arbitration initiated by an Iranian company (GAMARAK Ind. Co.) in 2017 against NTDC before an arbitral tribunal constitutedunder the rules of the International Chamber of Commerce (ICC), Paris.
The spokesmen said that in its detailed Award released on 24 April 2020,the arbitral tribunal has dismissed all the claims brought by the Iraniancompany and accepted and granted several counterclaims of NTDC amounting toapproximately PKR 714 Million (approx. 71 Crore or US$ 4.5 Million) plusinterest at the rate of 7.925 % per year as of the date of NTDC’scounterclaims dating back to July 2018 until full payment.
While dilating upon the details, the spokesman said that the dispute aroseout of a contract between the Iranian company and NTDC executed in February2011 for the design, supply, installation, testing, and commissioning of500 kV Guddu-Multan 3rd Circuit at Rahim Yar Khan 500kV substation.
NTDC had terminated the contract due to persistent delays on the part ofthe Iranian contractor and the project was eventually completed by anothercontractor.
The spokesman said that the Iranian company, GAM ARAK initiated thearbitration in early 2017 claiming an amount of approximately PKR 180Million (approx. US$ 1.1 Million) on account of unpaid invoices anddamages.
NTDC, apart from defending the claims, had filed its own counterclaimsalleging the Iranian company’s delays, the costs required to complete theproject from another contractor, and claims related to liquidated damages,mobilization advances, customs duties, and demurrage.
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On NTDC’s counterclaims, the arbitral tribunal held that NTDC had validlyterminated the contract as the Iranian company was responsible for thedelay in the project.
Accordingly, NTDC was awarded liquidated damages in the amount of JPY93,591,449 and PKR 57,493,057 to compensate NTDC for the delay in projectcompletion.
Furthermore, NTDC was also awarded the amounts of JPY 151,699,145 and PKR167,546,831 as differential costs in respect of the new contractor engagedby NTDC to complete the project.
