SINGAPORE, Oct. 4, 2023
/PRNewswire/ -- Kenon Holdings Ltd. (NYSE: KEN) (TASE: KEN)
("Kenon") announces that an arbitration tribunal (the
"Tribunal") constituted by the International Centre for
Settlement of Investment Disputes ("ICSID") has delivered a
final award (the "Award") in favor of Kenon and its
wholly-owned subsidiary IC Power Ltd. ("IC Power") in
an arbitration proceeding under the Free Trade Agreement between
Singapore and the Republic of
Peru ("Peru") ("Free Trade
Agreement").
The arbitration related to two disputes submitted in
June 2017 and November 2018 by Kenon and IC Power relating to
resolutions of the mining and energy regulator in Peru (OSINERGMIN) on secondary frequency
regulation and transmission tolls, based on events that occurred
while Kenon, through IC Power, owned and operated its former
Peruvian subsidiaries Kallpa and Samay I, which were subsequently
sold. The claims and proceeding are described in more detail
in Kenon's annual report on Form 20-F for the year ending
December 31, 2022 ("Form
20-F").
The arbitration tribunal concluded that Peru's resolution relating to secondary
frequency regulation breached Peru's obligations under Article 10.5 of the
Free Trade Agreement. The tribunal dismissed the claim relating to
transmission tolls.
As a result of Peru's breach of
the Free Trade Agreement, Peru has
been ordered to pay Kenon and IC Power $110.7 million in damages. Pre-award interest is
payable on the Award from November 24,
2017 to the date of the Award. Additionally, Peru has been ordered to pay Kenon and IC
Power $4.9 million to cover their
legal fees and expenses and a further $0.6
million in connection with Kenon and IC Power's share of the
costs of the arbitral tribunal and ICSID's administrative fees.
Pursuant to the ICSID Convention, Peru has 120 days from the date of the Award
to file an application to annul the Award on the limited grounds
established by the ICSID Convention.
As previously disclosed in Kenon's Form 20-F, Kenon and IC Power
have previously entered into an agreement with a capital provider
to provide capital for expenses in relation to the pursuit of these
arbitration claims and other costs. In the event that Kenon or IC
Power receive proceeds in connection with the Award, the capital
provider will be entitled to be repaid the amount committed by the
capital provider (which to date has equalled $12 million) and to receive up to approximately
55% of the net claim proceeds, subject to the terms of the
agreement among Kenon, IC Power and the capital provider.
The Award is subject to tax.
Caution Concerning Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements include statements with respect to the
arbitration award, the agreement with a capital provider and other
non-historical statements. These forward-looking statements are
based on current expectations or beliefs, and are subject to
uncertainty and changes in circumstances. These forward-looking
statements are subject to a number of risks and uncertainties,
which could cause the actual results to differ materially from
those indicated in these forward-looking statements. Such risks
include the risks related to the award including a potential
application to annul the award, the ability to enforce the award,
amounts that could be payable to the capital provider and other
risks including those set forth under the heading "Risk Factors" in
Kenon's most recent Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission. Except as required by law,
Kenon undertakes no obligation to update these forward-looking
statements, whether as a result of new information, future events,
or otherwise.
Contact Info
Kenon Holdings Ltd.
Deepa Joseph
Chief Financial Officer (Interim)
deepaj@kenon-holdings.com
Tel: +65 9669 4761
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SOURCE Kenon Holdings Ltd.