GMR informs that an arbitration award has been passed in a matter of claims between GKEL and SEPCO.
While SEPCO had claims on GKEL for project payments, prolongation costs etc., GKEL had made claims on SEPCO towards delays in project execution and towards defect liabilities, said GMR.
In 2014, GKEL has encashed bank guarantees of about RS580cr furnished by SEPCO which was utilised towards repayment of GKEL terms loans and consequential reduction of interest burden on the project.
In the latest development, GMR states that considering and accepting mutual claims of both GKEL and SEPCO, the arbitration tribunal has confirmed a net claim of Rs1,005cr payable by GKEL to SEPCO.
Notably, GMR also points out that there is an existing provision of Rs1,092cr appoximately in GKEL books towards any such liability, which covers the entire amount of this award and such liability, if any, is non-recourse to GIL and will have no impact on GIL's profitability.
"GKEL is studying the detailed arbitration award and is assessing the legal options as it can challenge the award within 90 days in courts in India," GMR added.