Kalpataru Power wins arbitration award of $32 million against Rwanda Energy Group

BSE-listed Kalpataru Power Transmission has won an arbitration award of more than $32 million (about Rs 236 crore) against the Rwanda Energy Group.
The dispute was over a contract to install and commission a 220 KV power transmission network interconnecting the Democratic Republic of the Congo and Rwanda in Central Africa.

The Indian power transmission and distribution firm had entered into a contract for the design, engineering, supply, construction, installation and commissioning of the network in November 2013. Construction began in October 2014 and the operational certificate was issued in May 2017.

“This was a multipurpose project under joint development by Rwanda and the Democratic Republic of Congo and was funded by the African Development Fund along with Kreditanstalt für Wiederaufbau,” said a person privy to the development.

According to the person, in February 2016, Kalpataru raised a claim of about $24 million against Rwanda Energy for a price adjustment, as per the terms of the contract. However, Rwanda Energy informed the Mumbai-based company to raise the claim after the completion of the project.

Soon after the completion of the project, when Kalpataru raised the claim in March 2017, it was disputed by Rwanda Energy.

As per the clauses in the agreement, the issue was referred to the Disputes Adjudication Board. In December 2019, the board ruled in favour of Kalpataru and said it was entitled to a price adjustment claim of $24 million-plus Rwandan franc of 35 million, along with interest of $3.6 million and Rwandan franc of 5.3 million.

Rwanda Energy challenged the ruling by initiating the arbitration process. A three-member arbitration tribunal, after hearing both parties, upheld the ruling of the board in favour of Kalpataru. On August 28, the tribunal directed Rwanda Energy to pay more than $32.25 million, including price adjustment claim and legal cost, within a month from the passing of the award.

When contacted, Kalpataru declined to comment. An email sent to Rwanda Energy seeking comment did not elicit any response till press time Wednesday.