Home News Company in the news

Asiatic Group's subsidiaries commence arbitration proceedings against Phnom Penh Special Economic Zone Plc for US$14.4 mil

Felicia Tan
Felicia Tan11/19/2020 06:17 PM GMT+08  • 2 min read
Asiatic Group's subsidiaries commence arbitration proceedings against Phnom Penh Special Economic Zone Plc for US$14.4 mil
The arbitration has been referred to the Singapore International Arbitration Centre.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Asiatic Group Holdings’ subsidiaries, Colben System and Colben Energy Holdings has begun arbitration proceedings against Phnom Penh Special Economic Zone Plc (PPSEZ) for a minimum of US$14.4 mil ($19.3 million) on Nov 19.

The arbitration has been referred to the Singapore International Arbitration Centre.

The case was made due to a dispute in connection with a power plant project in Cambodia.

According to Asiatic Group, PPSEZ breached a joint venture agreement (JVA) that was signed between Colben System and itself. The breach resulted in “substantial changes” in the power plant project’s operational and business model that were “detrimental” to the interests of the project.

Under the JVA, Colben System was tasked to build, and subsequently operate and maintain a heavy fuel oil fired power plant with an initial capacity of 15-megawatt within the Phnom Penh Special Economic Zone (SEZ).


See: Bobby Lim halves stake in Asiatic; Second Chance founder buys more shares

The plant, which was completed in 2008, was set up to provide a stable and reliable power source to companies located within the Zone.

According to the statement released by Asiatic Group on Nov 19, the PPSEZ allegedly instigated for revisions to the electricity tariffs, such that the Electricity Authority of Cambodia (EAC) on June 30, 2020, revised the rates that applied in the SEZ.

The EAC also allowed companies to opt for a supply of electricity from the national grid source without Asiatic Group’s power plant’s back-up feature.

The decision, according to Asiatic Group, would cause the Group to suffer anticipated losses in the revenue generated by the project.

Shares in Asiatic Group closed flat at 0.5 cent on Nov 19.

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.