Lopez firm wins arbitration case on BacMan plant

by Myrna Velasco – February 3, 2016

from Manila Bulletin

The operating vehicle of Energy Development Corporation (EDC) has won the arbitration case in connection with technical glitches encountered at the previous rehabilitation of its 130-megawatt Bacon-Manito (BacMan) geothermal power plant.

The court of arbitration of the International Chamber of Commerce (ICC) has ordered Weir Engineering Services Ltd. to already pay the phase 1 of the award to BacMan Geothermal Inc. (BGI), the Lopez firm’s subsidiary for the BacMan plant.

The initial amount to be settled shall be US$4,404,870; and must be paid “within seven days of the date of the partial award.”

The ICC noted that such is “pursuant to the favorable determination by the Engineer that sums are owed by Weir to BGI under the contract, together with post-award simple interest calculated at the rate of 5.33% per annum.”

There is another batch of payment of US$887,902.03 that shall complete the amount demanded by BGI in the Phase 1 of the arbitration proceedings.

Weir Engineering was further ordered to settle this amount “within 21 days from the date of the partial award.”

It qualified that this shall account as “reimbursement for the legal costs incurred by BGI in connection with the emergency arbitrator and Phase 1 proceedings at the ICC.”

Beyond its verdict on the specified award, the arbitral tribunal has “dismissed all other claims brought in connection with Phase 1 whether by BGI or Weir.”

Nevertheless, this excluded “BGI’s application for damages for wasted costs, which the partial award reserved for final determination in phase 2.”

The ruling has stipulated that “the remaining disputes between the parties will be decided by the ICC Tribunal in the future phase 2 award.”

Weir Engineering was tapped by BGI in 2012 to undertake rehabilitation works on the plant’s steam turbine, generator and rotor installations, but contractual breaches have been allegedly committed.

The rehabilitation of the BacMan plant had been intended to bring its efficiency run closer to installed at 150 megawatts, nevertheless, due to some hurdles encountered, the facility’s return to operation had been delayed for some time.