February 17, 2023 (MLN): Sui Northern Gas Pipelines Limited (SNGPL)'s challenge to two arbitration awards rendered in LCIA Arbitrations has been dismissed by the English High Court, the notification issued by the company to PSX revealed today.
The cases involved disputes under gas sale agreements that SNGPL has with National Power Parks Management Company (Pvt) Limited, a company wholly owned by the Federal Government.
While the Court held that part of the Awards manifested a degree of confusion, it also decided that the parties were proceeding on a false premise and that both SNGPL and NPPMCL were in agreement about the particular point of interpretation of the relevant gas sale agreements which formed one of the grounds of challenge.
SNGPL is now consulting its lawyers in respect of this judgment and will decide what action to take to protect its interests going forward.
In a previous disclosure dated December 15, 2021, SNGPL reiterated its position that, under the terms of the license granted to it by OGRA, the company will take up the matter with the regulator for determining the impact of the Awards on revenue requirements.
The company also noted that since the relevant Awards relate to Take or Pay transactions that were earlier offered to the Regulator as operating, the reversal of the same is not expected to have any material adverse impact on the profitability of the Company.
However, the final outcome of the same will depend on the determination by the Regulator.
The impact of the decision on SNGPL's revenue requirements and profitability is expected to be determined by the Regulator in due course.
