Niko Resources Ltd NKRSF

RE:Bangladesh media reports Petrobangla loses to NKO...UP WE GO

[G4General]

June 7, 2016

Petrobangla Finally Loses Legal Battle To Niko

Must Pay 275 Crore BDT

EB Report

 

The state-owned Petrobangla has finally lost to Niko Resources, as an
international court gave its final verdict, saying it would have to
pay 275 crore and 34 lacs taka as compensation. It is assumed that the
failure of authorities to represent appropriate data caused this loss.
The International Center for Settlement of Investment Disputes (ICSID)
upheld its previous verdict after a final hearing held on 26th of May;
Niko has confirmed it by a statement on Mondy.

 

According to a high official from Petrobangla, It will now define its
next move according to the government’s high-command.

The ICSID issued the decision on the Payment claim initiated by Niko
for gas delivered from November 2004 to April 2010; So, Petrobangla
has to pay a total amount of 275 crore and 34 lacs Tk approximately as
a compensation; again with interest of 51 crore and 80 lacs Tk for up
to Sept. 11, 2014 and with interest from Sept. 12, 2014, at the
sixmonth LIBOR plus 2 percent rate for U.S. dollar amounts and 5
percent for BDT amounts, compounded annually.

The ICSID said the payment must be made immediately and is not subject
to any contrary orders from the Courts in Bangladesh. The tribunal may
play the role of compromiser if any   issues arise regarding the
payment.
Niko initiated gas supply from Feni gas-field from November 2004, and
continued until April 2010. It stopped gas production from the field
after lodging an arbitration suit with ICSID. Petrobangla initially
made payments to Niko Resources, but later stopped paying in line with
verdict from local court, following two consecutive blowouts in
Niko-operated Chhatak gas-field in Sunamganj. Several national and
international investigations showed that the Niko was solely
responsible for both the blowouts. So, cases has been filed against
Niko for a compensation of 746.50 crore taka on that regard.
Later Niko filed two separate cases at ICSID on two separate days
namely on 12th April and 16th June of 2010; one claiming arrears
(RB/10/18) and another demanding exemption from compensation
(RB/10/11).

On 11th September of 2014 ICSID ordered Petrobangla to pay the arrears
to Niko in a verdict. However, the Petrobangla later appealed for a
review and finally the verdict remains the same