LAHORE: The Sui Northern Gas Pipelines Ltd (SNGPL) is going into appeal against a decision of the London Court of International Arbitration (LCIA) in favour of three independent power producers which it declared would receive Rs800 million as capacity payments.

The company says a number of issues, including use of alternative fuels by IPPs, have not been addressed in the court decision, and now it has pursued legal recourse against the capacity payments awarded in favour of IPPs.

It further says the deduction of Rs800 million is illegal as IPPs even did not get permission from a local court where the government earlier took stay order against the first appeal by IPPs.

The amount was against the supply of RLNG which is a petroleum product and not against the supply of natural gas.

The LCIA arbitration was conducted on the issues of force majeure event declared by the SNGPL on account of sabotage activities on transmission and not diversion.

The arbitration award has not been filed in the court and is currently not a rule of court and, therefore, not enforceable.

Published in Dawn, May 28th, 2016