Foreign contractor drops arbitration case vs EDC


BACMAN Geothermal Inc. (BGI), a wholly owned subsidiary of the Lopez family’s Energy Development Corp. (EDC), said Thursday that its European contractor has withdrawn its request for arbitration with the Construction Industry Arbitration Commission (CIAC) and that the commission has dismissed the proceedings before it on that basis.

Arbitration is an alternative scheme of settling disputes between or among parties that could be done outside the confines of the courts.

BGI said it engaged Weir Engineering Services Ltd. (Weir) to carry out rehabilitation works on steam turbine, generator and rotor installations in three existing power-generating units at the BacMan I Plant in Palayan and at Unit 3 of the BacMan II Plant in Cawayan.

In a disclosure, EDC said that on April 14, 2015, BGI received a request for arbitration filed by Weir with the CIAC.

BGI, which operates the Bacon-Manito (Bacman) geothermal plants in the Bicol Region, had requested for arbitration against Weir at the International Court of Arbitration (ICA) of the International Chamber of Commerce (ICC).

In an earlier disclosure to the Philippine Stock Exchange (PSE), EDC said that Weir breached the contract for works on the steam turbine and generator of Bacman Units 1, 2 and 3.

BGI had sought payment of $8.81 million in damages.

Earlier, Weir had also filed arbitration proceedings against EDC over an alleged “unpaid balance of the contract price” but it did not indicate the actual “unpaid balance.”

The disclosure said that on April 20, 2015, BGI initiated arbitration proceedings with the International Court of Arbitration of the ICC in order to enforce its rights under its Contract for Works —Completion of Works to Steam Turbine and Generator of Units 1, 2 and 3 dated 29 March 2012 with Weir, following a favorable determination by the engineer appointed pursuant to the contract that sums are owed by Weir to BGI.

On February 2, BGI received the ICC’s Phase 1 Award dated February 1, in which, among other things, the ICC tribunal declared that it has exclusive jurisdiction to hear and finally determine the parties’ disputes and ruled that Weir was “permanently restrained from pursuing proceedings in any other dispute resolution forum, including the CIAC,” in connection with disputes arising under the contract that have validly been referred by BGI to arbitration under the ICC rules.

BacMan consists of BacMan I with two 55-megawatt turbines and BacMan II with 20-MW geothermal facilities.

The geothermal power plants are located in the towns of Bacon in Sorsogon Province and Manito in Albay.


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