Arbitration Panel Dismisses Case on Exorbitant Pricing in NEPCO-APCO Agreement

A judicial ruling was issued Tuesday in the arbitration case involving the National Electric Power Company (NEPCO) and the Jordanian government against the Attarat Power Company (APCO). The arbitration, initiated in late 2020, sought to address claims of exorbitant pricing in the power purchase agreement (PPA) established with APCO in 2016. NEPCO and the Jordanian government pursued international arbitration to obtain a ruling on the pricing issues in the PPA, without seeking to halt project implementation or terminate the agreement. Prior to initiating arbitration, NEPCO engaged in amicable negotiations with APCO and remained open to further discussions during the arbitration process, demonstrating a willingness to resolve disputes through dialogue. The arbitration tribunal ultimately upheld the legal basis of NEPCO's claims, recognizing that NEPCO's funds are state funds and that the agreement could be contested if deemed grossly unjust. However, the tribunal employed a return-on-investment criterion to evaluate the claims of pricing unfairness, which resulted in the dismissal of the case. Consequently, the tribunal ruled that neither the Jordanian government nor NEPCO is required to reimburse APCO for any legal costs incurred during the defense. Throughout the four-year arbitration period, NEPCO did not suspend project operations or disrupt the execution of agreements, thereby ensuring continuity of the project. This outcome ensures that NEPCO will not bear additional burdens due to the case's dismissal and will not assume any new responsibilities beyond those outlined in the original project agreements established in 2016. The execution of these agreements will continue in compliance with applicable Jordanian legislation. This ruling underscores the importance of arbitration as a mechanism for resolving complex contractual disputes while maintaining operational stability and legal clarity for involved parties. Source: Jordan News Agency