affected IPP said instead of challenging the decision of the expert at the relevant forum, the NTDC obtained a stay order against the decision from a civil court in Lahore.
“The power purchase agreement clearly laid down the procedure to resolve dispute and any deviation from the procedure was violation of the agreement,” the official said.
“The IPPs have simply asked the international arbitrators to order the NTDC to make the payment determined by a mutually agreed Pakistani expert.” Sources said all the nine IPPs have filed for international arbitration independently. They added that the international arbitrators have already issued notices to the NTDC to come and defend the case. The verdict of the arbitrator would be binding on both parties since an international arbitration clause was included in the power purchase agreement signed by the two parties. In case the international arbitrators in London uphold the verdict of the local experts, the NTDC would be bound to make the payment, and in case of its failure, the IPPs could invoke the sovereign guarantee of the government of Pakistan. Experts said a government entity failing to honour its contractual obligation with the investor sends a wrong message to the business circles around the world.
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