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Saturday, June 11, 2016, Jaistha 28, 1423 BS, Ramadan 5, 1437 Hijri

Petrobangla loses Niko case 
Dereliction of officials blamed
Published :Saturday, 11 June, 2016,  Time : 12:00 AM  View Count : 12
Jannatul Ferdousy  
The state-owned Petrobangla has lost its appeal against Niko Resources in the International Centre for Settlement of Investment Disputes (ICSID) due to the failure of officials to present vital data before the court. The ICSID upheld its previous verdict after a final hearing on May 26.
According to the verdict Petrobangla has to pay Tk 275.34 crore as compensation. It is assumed that the failure of the authorities to present appropriate data caused this loss.
A Petrobangla official said lack of enthusiasm of some officials resulted in losing the case. The responsible officials did not present actual information of the accident at the hearing.
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 Tk 275.34 crore approximately, as compensation with interest of Tk 51.80 crore for up to September 11 of 2014 and with interest from September 12 in 2014, at six?month LIBOR plus 2 per cent rate for US dollar and 5 per cent for BDT, 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 a mediator if any issues arise regarding the payment.
Niko initiated to supply gas 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 the verdict from a 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, a case has been filed against Niko for seeking compensation of Tk 746.50 crore in this regard.
Later Niko filed two separate cases with ICSID on two separate days -on April 12 and  June 16 of 2010- one claiming arrears and another demanding exemption from compensation.
On September 11 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.

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