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ICSID rectification decision sets interest at Peru’s cost of debt with annual compounding, corrects arbitration costs; US$110.7m damages against Peru under Peru–Singapore FTA unchanged

Published on: 22 May 2024

Published by a LexisNexis Arbitration expert
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IC Power Ltd, et al v Republic of Peru, No ARB/19/19, ICSID

On 17 May 2024, the ICSID tribunal issued its rectification decision. It had been sent to the parties on 3 May 2024 by the tribunal, consisting of Professor Luca G Radicati di Brozolo as president, David R Haigh KC, appointed by the claimants, and Eduardo Siqueiros T, appointed by Peru.

Power plants

In 2015, IC Power Ltd and its parent, Kenon Holdings Ltd, both Singaporean entities, obtained indirect controlling stakes in three Peruvian companies that owned and ran five electricity generation plants in Peru. On 27 June 2019, ICSID registered their request for arbitration against Peru under the Peru–Singapore free trade agreement.

The claimants sought US$195.3m in damages from Peru, alleging harm to their energy investments arising from two new resolutions regulating the electricity generation industry in June 2016. They contended that Resolution No 141 specifically revoked one of their Peruvian companies’ right, under a long-term contract, to be on ‘permanent dispatch’, yielding higher profits. They said that Peru’s government then required the company to continue supplying electricity under the contract for reduced profit. On 24 November 2017, the claimants sold their investments in Peru...

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