Kalpataru Power wins $32 mn arbitration award against Rwanda Energy

24 Sep 2021 CW Team

Kalpataru Power Transmission has obtained an arbitration award of over $32 million against the Rwanda Energy Group.

The dispute was over an agreement to establish and commission a 220 kV power transmission network interconnecting the Rwanda and Democratic Republic of the Congo in Central Africa.

The Indian power transmission and distribution company had entered into a deal for the engineering, design, supply, development, establishment and commissioning of the network in November 2013. Development started in October 2014, and the operational certificate was released in May 2017.

It was a multipurpose project under joint development by Rwanda and the Democratic Republic of Congo, financed by the African Development Fund along with Kreditanstalt für Wiederaufbau.

In February 2016, Kalpataru raised a claim of around $24 million against Rwanda Energy for a cost adjustment, as per the terms of the agreement. But, Rwanda Energy notified the Mumbai-based firm to raise the claim after the project completion.

Soon after the project got completed, when Kalpataru raised the claim in March 2017, it was challenged by Rwanda Energy.

According to the clauses in the contract, the issue was referred to the Disputes Adjudication Board. In December 2019, the board ordered in favour of Kalpataru and said that it was entitled to a cost adjustment claim of $24 million-plus Rwandan franc of 35 million, along with interest of $3.6 million and Rwandan franc of 5.3 million.

Rwanda Energy disputed the ruling by starting the arbitration process. After hearing both the parties, a three-member arbitration tribunal confirmed the ruling of the board in support of Kalpataru. On August 28, the tribunal ordered Rwanda Energy to pay over $32.25 million, covering price adjustment claim and legal cost, within a month from the passing of the award.

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Also read: BHEL successfully implements UHVDC link in western, southern grid

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Kalpataru Power Transmission has obtained an arbitration award of over $32 million against the Rwanda Energy Group. The dispute was over an agreement to establish and commission a 220 kV power transmission network interconnecting the Rwanda and Democratic Republic of the Congo in Central Africa. The Indian power transmission and distribution company had entered into a deal for the engineering, design, supply, development, establishment and commissioning of the network in November 2013. Development started in October 2014, and the operational certificate was released in May 2017. It was a multipurpose project under joint development by Rwanda and the Democratic Republic of Congo, financed by the African Development Fund along with Kreditanstalt für Wiederaufbau. In February 2016, Kalpataru raised a claim of around $24 million against Rwanda Energy for a cost adjustment, as per the terms of the agreement. But, Rwanda Energy notified the Mumbai-based firm to raise the claim after the project completion. Soon after the project got completed, when Kalpataru raised the claim in March 2017, it was challenged by Rwanda Energy. According to the clauses in the contract, the issue was referred to the Disputes Adjudication Board. In December 2019, the board ordered in favour of Kalpataru and said that it was entitled to a cost adjustment claim of $24 million-plus Rwandan franc of 35 million, along with interest of $3.6 million and Rwandan franc of 5.3 million. Rwanda Energy disputed the ruling by starting the arbitration process. After hearing both the parties, a three-member arbitration tribunal confirmed the ruling of the board in support of Kalpataru. On August 28, the tribunal ordered Rwanda Energy to pay over $32.25 million, covering price adjustment claim and legal cost, within a month from the passing of the award. Image SourceAlso read: BHEL successfully implements UHVDC link in western, southern grid

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