Vendor in contract spat with Sembcorp’s wind-power unit in India files new counterclaim
Sembcorp says the new claim is unlikely to succeed, so no provision needs to be made; its unit is also in a strong position to defend itself
A VENDOR involved in a contract dispute with Sembcorp Industries ’ indirect, wholly-owned Indian subsidiary, Green Infra Wind Energy Limited (GIWEL) has added another claim to the dispute, bumping up its total counterclaim against the subsidiary.
The counterclaim stems from a dispute between both parties over a composite supply contract and land and site-development contract.
In an update on the dispute on Tuesday (May 21), Sembcorp said the arbitral tribunal had agreed on May 17 to allow the vendor, Siemens Gamesa Renewable Power, to amend its counterclaim to include an additional 2.9 billion rupees (S$47.5 million) under two bank guarantees that are part of the existing dispute.
This brings the aggregate amount of the vendor’s counterclaim to 22.5 billion rupees (S$365.4 million).
The contract was initially entered into by both GIWEL and the vendor to supply, erect and commission a 300MW wind-power project, comprising 143 wind-turbine generators and associated transmission facilities.
Sembcorp had said previously that following various defaults on the vendor’s part, GIWEL terminated the contract and filed a statement of claim against the vendor for 8.2 billion rupees (S$134.1 million) in the vendor’s FY2023.
In response, the vendor filed its statement of defence and counterclaimed 19.6 billion rupees (S$321.7 million).
In its update on Tuesday, Sembcorp said that, based on external legal advice and on information available currently, its management believes that the probability of success of this additional counterclaim by the vendor against GIWEL is remote.
“Therefore, Sembcorp management continues to take the position that no provision needs to be made,” it said.
It added that its Indian subsidiary is “in a strong position” to defend its counterclaim against the vendor, and that the arbitration is not expected to have a material adverse impact on GIWEL’s financial results.
The arbitration is also not expected to have a material impact on the earnings per share or net tangible assets per share of Sembcorp for the financial year ending Dec 31, 2024, the company added.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
