EDC unit wins $5 M case vs contractor

MANILA, Philippines – Lopez-owned Energy Development Corp. (EDC), through subsidiary BacMan Geothermal Inc. (BGI), will receive from contractor Weir Engineering Services Ltd. over $5 million in damages following a favorable decision from the International Chamber of Commerce (ICC).

EDC said the ICC’s International Court of Arbitration on Feb. 1 has made partial award in favor of BGI for Weir’s breaches of contract.

Weir was ordered to pay BGI $4.4 million within seven days of the date of the partial award, together with post-award simple interest rate of 5.33 percent per annum.

The ICC Tribunal noted this is based on the “favorable determination by the engineer which are sums owed by Weir to BGI under the contract.”

The international court also ordered  Weir to pay BGI another $887,902 “as reimbursement for the legal costs incurred by BGI in connection with the emergency arbitrator and Phase 1 proceedings at the ICC.”

Meanwhile, the remaining disputes between the parties will be decided by the ICC tribunal in the future award.

In April last year, BGI sought for an arbitration with the ICC to enforce its contract, which Weir violated.

Weir had sought for legal relief with the Construction Industry Arbitration Commission (CIAC).

However, the ICC tribunal has declared it has the exclusive jurisdiction to hear and finally determine the parties disputes.

With that, it ordered that the contractor is restrained from pursuing proceedings in any other dispute resolution forum, including the CIAC.

The international court also “dismissed all other claims brought in connection with Phase 1 whether by BGI or Weir, save for BGI’s application for damages for wasted costs, which the partial award reserved for final determination in Phase 2.”

EDC acquired the Bacon-Manito (BacMan) plant in Albay from the government in May 2010 with a winning bid of $28.25 million in an auction conducted by the Power Sector Assets and Liabilities Management Corp. (PSALM), which has the mandate to privatize state-owned National Power Corp. (Napocor) assets.

The BacMan plant consists of Unit 1 (55 MW), Unit 2 (55 MW) and Unit 3 (20 MW) and started operating early 2015, after more than a year of delay due to breach of contract on the part of its contractors tapped to rehabilitate the facility.