Kenon Awarded $116.2 Mln In Arbitration Proceedings For Peru's Breach Of The Free Trade Agreement
(RTTNews) - Kenon Holdings Ltd. (KEN) announced Wednesday that an arbitration tribunal constituted by the International Centre for Settlement of Investment Disputes has delivered a final award in favor of Kenon and its wholly-owned subsidiary IC Power Ltd. in an arbitration proceeding under the Free Trade Agreement between Singapore and the Republic of Peru.
The arbitration related to two disputes submitted in June 2017 and November 2018 by Kenon and IC Power relating to resolutions of the mining and energy regulator in Peru on secondary frequency regulation and transmission tolls.
This is based on events that occurred while Kenon, through IC Power, owned and operated its former Peruvian subsidiaries Kallpa and Samay I, which were subsequently sold.
The arbitration tribunal concluded that Peru's resolution relating to secondary frequency regulation breached Peru's obligations under Article 10.5 of the Free Trade Agreement. The tribunal dismissed the claim relating to transmission tolls.
As a result of Peru's breach of the Free Trade Agreement, Peru has been ordered to pay Kenon and IC Power $110.7 million in damages. Pre-award interest is payable on the Award from November 24, 2017 to the date of the Award.
Additionally, Peru has been ordered to pay Kenon and IC Power $4.9 million to cover their legal fees and expenses and a further $0.6 million in connection with Kenon and IC Power's share of the costs of the arbitral tribunal and ICSID's administrative fees.
Pursuant to the ICSID Convention, Peru has 120 days from the date of the Award to file an application to annul the Award on the limited grounds established by the ICSID Convention.
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