DHAKA, Aug 2: The army-backed interim government has decided to drop the case filed by state-run Bangladesh oil, gas and mineral corporation Petrobangla against US-based energy firm Chevron Corp, a senior official said on Saturday.

Petrobangla filed the case in a Dhaka court last year as the US firm lodged an arbitration suit over a debate on transmission charges for gas supply from a field in Bangladesh. The government will face the arbitration suit with the International Centre for Settlement of Investment Disputes (ICSID), an institution of the World Bank group, the official said.

“We will withdraw the case from the local court and will face it in the ICSID as our counsellor suggested,” said Jalal Ahmed, chairman of Petrobangla.

“The counsellor also suggested for an amicable solution. We have already opinion from the law ministry in favour of our counsellor,” Jalal told Reuters just before leaving for the Netherlands to attend the hearing on Tuesday.

Bangladesh was not prepared to face the issue on August 5 and hence requested to defer the arbitration till on October 23.

But the ICSID set condition to withdraw the case to defer the hearing, the official said.

Chevron filed the suit with the ICSID demanding back 4 per cent of the gas sales proceeds from the Jalalabad gas field it had paid to Petrobangla as transmission charges.—Reuters