Singapore, December 12, 2006—On October 2, Shearman & Sterling client Lahmeyer International Pally Power Services secured an award of over US$20 million in an arbitration against Rural Power Company, a Bangladeshi State-owned power producer.  The dispute arose from the abrupt termination by Rural Power of a 15-year agreement with Lahmeyer for the operation and maintenance of a power plant in Mymensingh, Bangladesh.  In October 2005, two months after the contract was terminated, Lahmeyer filed the Request for Arbitration.

The Tribunal ruled that Rural Power had wrongfully terminated the contract and driven Lahmeyer’s employees away from the site.  It awarded Lahmeyer all the compensation claimed, and ordered Rural Power to reimburse their legal and other costs.  In addition, the Tribunal held that delays in compliance with the award will result in Rural Power having to pay compound interest on the total amount until it is paid in full.

The Tribunal was composed of Michael Lee (Chair - UK), Andrew Rogers, QC (Australia) and Michael Pryles (Australia).  The case was heard under the UNCITRAL Rules and was administered by the Singapore International Arbitration Centre (SIAC).  Another arbitration is still pending between the same parties before another arbitral tribunal, regarding the termination of a similar contract for the Dhaka North power plant.

Attorneys on these cases include partner John Savage (International Arbitration-Singapore) and associates Yu-Jin Tay and Kenza Margaoui (both International Arbitration-Singapore).