Dhaka, May 18 (bdnews24.com) - Chevron's US$240 million claim against the government has been unanimously rejected by the International Centre for Settlement of Investment Disputes (ICSID).
The three-member ICSID tribunal in its award published on Tuesday unanimously dismissed the US oil giant's claim "on the merits" of the case.
The dispute related to whether, under the Production Sharing Contracts for the blocks covering the Bibiyana, Moulavibazar and Jalalabad gas fields, Petrobangla was entitled to receive 4 percent of Chevron's total share of natural gas.
Petrobangla argued that this was necessary to cover tariffs and losses incurred when Chevron used the Petrobangla pipeline to supply natural gas for the Bangladesh domestic market. It also contended that the provision for the four percent tariff was provided in the relevant sections of the contract dealing with the sale of gas.
Chevron argued that the four percent deductions, which had been made by Petrobangla since the commencement of production in 1999, was only applicable to the sale of the gas to third parties.
Chevron went to the ICSID for arbitration on Mar 17, 2006 against Bangladesh.
At the time of the hearing in May 2009, the company claimed $240 million as well as 4 percent of the total amount of natural gas produced in Bangladesh for the lifetime of the gas fields.
The government was represented by Bangladesh law firm Dr Kamal Hossain and Associates – with Dr Hossain, Dr Sharif Bhuiyan, and Moin Ghani deliberating in the arbitration – and by senior advocate Mahmudul Islam.
It was also represented by foreign lawyers Toby Landau QC (Essex Court Chambers), Jeremy P. Carver (solicitor), Samuel A. Stern (Hills Stern & Morley LLP), and Professor Laurence Boisson de Chazournes (University of Geneva).
Chevron were represented by King & Spalding, LLP.
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