ICSID Orders Petrobangla to Pay Niko $35M It Owed for Gas Deliveries

Canada's Niko Resources Ltd. reported Monday that Bangladesh Oil Gas & Mineral Corp. (Petrobangla) has been ordered by the International Centre for Settlement of Investment Disputes (ICSID) to pay approximately $35.3 million to its indirect subsidiary Niko Resources (Bangladesh) Ltd. (NBRL) for the amount owed to the latter for gas deliveries made under the Feni Gas Purchase and Sale Agreement.

The ICSID issued the Third Decision on the Payment Claim initiated by the NRBL against state-owned Petrobangla seeking approximately $25 million plus around $1.8 million (BDT 140 million) for gas delivered from November 2004 to April 2010; $6 million and $0.64 million (BDT 50 million) in interest to Sept. 11, 2014; and interest from Sept. 12, 2014, at the six‐month London Interbank Offered Rate plus 2 percent for U.S. dollar amounts and 5 percent for BDT amounts, compounded annually.

Niko said the payment must be made immediately and is not subject to any contrary orders from the Courts in Bangladesh. In addition, the company said that in view of past difficulties that have occurred with respect to the payment of the amount owed to NRBL, the Tribunals will retain jurisdiction over Petrobangla and NRBL until final settlement of the payment.

"There is no assurance that Petrobangla will comply with the Third Decision on the Payment Claim," Niko said in the press release.

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