JSPL wins USD 22.5 million arbitration against Bolivian company
Jindal Steel and Power arm, Jindal Steel Bolivia has won a more than USD 22.5 million arbitration judgement against the south American country's state-run mining company Empresa Siderurgica del Mutun (ESM).
"Jindal Steel Bolivia, an entity of leading international company Jindal Steel and Power Ltd. (JSPL), has been vindicated in connection with its investment in the 'El MutAn' project in Bolivia by an international tribunal ordering payment to Jindal of more than USD 22.5 million by Bolivian state-owned entity Empresa SiderArgica del Mutun (ESM)," JSPL said in a statement Saturday.
"Jindal has been one of the foreign investors impacted by anti-investor policies and conduct by Bolivia in recent years. Jindal's investment in Bolivia related to El MutAn, a deposit of approximately 40 billion tons of iron ore in eastern Bolivia near Brazil and Paraguay," the statement said.
"Jindal entered into a 2007 joint venture contract with the Bolivian State, ESM, and another state entity, COMIBOL, to develop and exploit El MutAn. Jindal invested tens of millions of dollars in the project, including providing USUSD 18 million in project guarantees," it added.
Jindal commenced arbitration before the International Chamber of Commerce (ICC) in Paris and sought recovery of USD 18 million principal, plus interest, related to the illegal encashment of the bank guarantees.
"In an award dated Aug 6, the ICC Tribunal agreed, granting principal plus interest for a total in excess of USD 22.5 million," the statement said.
The tribunal ruled that there was "more than sufficient evidence to establish that ESM did not comply with the obligation to deliver the lands" and this suspended Jindal's obligations under the contract, said the Jindal statment.
Jindal has now commenced a second ICC arbitration related to the project, focused among other things on damages arising out of the termination of the MutAn contract. "Jindal is seeking damages approaching approximately USD 100 million. The case is pending," it added.
(Posted on 23-08-2014)