The arbitration process proposed by the firm Inter Rao, ex-contractor of the Toachi-Pilatón project, against the Electricity Corporation of Ecuador (Celec), amounts to a total of USD 86 million, according to the State Attorney General’s Office
The Russian company filed this appeal on December 14, 2018 at the arbitration and mediation center of the Chamber of Commerce of Santiago de Chile. In this instance, the international tribunal must be established to deal with this request.
Carlos Pérez, Minister of Energy and Non-Renewable Natural Resources, mentioned that this process should continue. The State, through the Celec and the Procurator’s Office, will present their evidence of defense in this case.
The Attorney General’s Office informed that the request for arbitration was answered on January 18. The position and arguments of the Ecuadorian State will be for the benefit of national interests, added the entity, but did not give details, because this commercial arbitration has the character of confidential.
“We consider that we have all the documentation and the necessary backups to justify the decision of the Ecuadorian State to have terminated the contract,” Perez said in a television interview on February 28.
In addition, the official argued that the current government made the effort to try to restart the work with the company Inter Rao, but no agreement was reached. The firm was in charge of installing the electromechanical equipment in Toachi-Pilatón, that is, turbines, generators, gates, valves and others that are required for this hydroelectric plant. But the contractor left this work in March 2017, after the previous government unilaterally terminated the contract, due to alleged breaches that have been dismissed, according to the Russian company.
This process included the classification of an unfulfilled company in the registry of State suppliers. Inter Rao informed, through an e-mail sent to this newspaper that it expects that through international arbitration there will be a legal defense of its rights which, it considers, have been violated.
Despite this, he said he was open to continue the dialogue with the Celec to look for a possible extrajudicial solution to this controversy. This arbitration is one of the 66 cases filed against the State until December 2018, according to the Attorney General’s Office.
According to information from the entity, 20 of the 66 cases were filed during 2018. Apart from Inter Rao, there are those filed by Juan Andrés Baquerizo Escobar, José Larrea, Daniel Penades III, FAE, Ufinet, China Railway, Ayesa Consortium and others.
In order to reduce, in part, the conflict rate faced by the State and seek solutions to international disputes filed by contractors or investors, the PGE reported that during the last quarter of 2018 it led several negotiation processes that concluded with the withdrawal of “paths” “Notifications of controversy and international arbitration.
Currently, the processes maintained by the Attorney General’s Office amount to a total of USD 13,913.5 million. This figure is below the one managed by the entity a year ago. Then, the amount amounted to a total of USD 14 772 million. But nine cases ended last year; among them, Repsol 3 and Ecuador FTA II.
These processes represented an amount of USD 1 532.5 million against the country. But in the courts it was decided that Ecuador should pay 36% of this amount. That is, USD 553.7 million. Thus, the Attorney General’s Office avoided the payment of USD 978.7 million. (I)