The tribunal confirmed that Jindal Steel and Power is entitled to prompt receipt of $22.5 million, with a deadline of 26 September, says the firm
New Delhi: Sticking to its earlier order, an international tribunal has rejected a petition by a Bolivian state-run firm and asked it to pay the entire $22.5 million to Jindal Steel and Power Ltd (JSPL) by next week, the Indian company said on Wednesday.
The International Chamber of Commerce (ICC) tribunal had in the last month ordered the Bolivia government-run Empresa Siderúrgica del Mutun (ESM) to pay the amount, but ESM filed a request for clarification and supplementation of the award.
“The tribunal rejected the Bolivian challenge in a decision dated 29 August 2014, received by Jindal on 11 September. The tribunal confirmed that Jindal is entitled to prompt receipt of the full amount ordered, with a deadline of 26 September," JSPL said in a release.
The company had commenced arbitration before the ICC of Paris and sought recovery of $18 million principal plus interest, related to an illegal encashment of bank guarantees, in connection with a project that never took off.
JSPL had in 2007 entered into a joint venture pact with Bolivian state, ESM and another state-run firm to develop and exploit El Mutun iron ore mine, having reserves of around 40 billion tonnes of iron ore in eastern Bolivia.
JSPL said it had invested “tens of millions of dollars" in the project, including providing $18 million in project guarantees. But, the project impeded because it never received access to land where the project was to be developed, contrary to the contract.
“The international tribunal, with arbitrators from Argentina, Britain and Venezuela, specifically found that the Bolivian request did not even comply with applicable rules and instead demonstrated Bolivian ‘non-conformity’ with the ruling," JSPL said in the statement.
“The tribunal highlighted that its reasoning in the award was complete, consistent and coherent. It further confirmed that neither the ICC arbitration rules nor the Bolivian arbitration statute cited in the request allow for reconsideration of the grounds of an award. As stated by the tribunal, the award is ‘mandatory’, ‘to carry out without delay’, it added.
JSPL said a second case related to the El Mutún project is pressing forward against Bolivia and relevant state firms, including ESM. That case relates to further violations of law and harm to Jindal, which was forced to exit its joint venture contract in 2012.
“An ICC tribunal has been constituted and the case is advancing against Bolivia and its entities," JSPL said.
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