December 24, 2022 (MLN): The Standby Letter of Credit (SBLC) in HUBC’s case has been extended on mutually agreed terms till February 23, 2023, the latest order by Sindh High Court (SHC) revealed.
Though the company on Friday informed through a notification to exchange regarding the withdrawal of the encashment notice by China Power Hub Generation Company (CPHGC) and SBLC’s extension, the date of the extension was not disclosed.
Accordingly, the instant high court appeal is adjourned to be fixed after four weeks.
To recall, on November 23, 2022, CPHGC served an encashment notice worth $150 million under the SBLC, on the issuing bank provided by HUBC.
In response, HUBC initiated legal proceedings against the encashment notice to safeguard the interests of its shareholders.
Earlier, HUBCO had extended the guarantee once at the instance of respondents, however, when HUBCO approached the National Bank of Pakistan (NBP) for further extension, the bank expressed its inability to extend the same on account of restrictions in the Regulation of the State Bank of Pakistan (SBP), therefore, the appellants, who were already performed their part of an obligation as per the agreement and have not committed any default, have been placed in a highly disadvantageous position.
Given this, there is a probability that in case the guarantee is allowed to encash an amount of Rs35 billion will be required to be paid by HUBCO, which will have a serious financial impact on the remaining power projects of the company.
keeping in view the facts as stated above, and in order to place both the parties at an equal level field to protect their rights, without causing any injury or placing any party in a disadvantageous position, the SHC deemed it appropriate to hear the parties in detail in order to ascertain as to whether there has been any default on the part HUBCO.
The court also demanded to hear the instance of NBP as well as the consortium (China Development Bank), who have not been impleaded as a party either in the suit as well as in the instant High Court Appeal while the issuance of the completion certificate of the project is within their domain.
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Posted on: 2022-12-24T15:52:59+05:00
