Chinese state-owned company sues Honduras for $125 million
Photo: Wikimedia Commons.
The Chinese state-owned company China Energy Engineering Group filed a lawsuit against Honduras’ National Electric Energy Company (ENEE), for almost US$125 million.
China Energy Engineering Group had won a bid earlier this year to supply 80 megawatts of power to the ENEE. However, the ENEE annulled the contract due to alleged breaches by the Chinese state-owned company.
As a result, China Energy filed a lawsuit before the Administrative Court of Appeals, requesting US$124.9 million in damages from the State of Honduras.
China Energy was the only participant in the bid, awarded on February 2, to operate plants in the cities of San Pedro Sula and La Ceiba.
In addition, the company is demanding the reimbursement of US$2.5 million for a guarantee executed by the ENEE, plus a legal interest of 7%, bringing the total amount claimed to US$127.4 million.
Miguel Aguilar, president of the ENEE’s Workers Union, criticized the initial awarding of the contract to the Chinese company due to an alleged lack of competition, which he considers a strategic error that could have been avoided.
The situation reflects a recurring problem in the Honduran energy sector, which already has nine lawsuits filed in the International Center for Settlement of Investment Disputes, and one in the national courts.
Lawyer Javier Briceño, who specializes in international arbitration, anticipates that more lawsuits from Chinese companies could arise as negotiations of the Free Trade Agreement (FTA) with China continue.
According to Briceño, due to the absence of a protective framework for Chinese investors, domestic litigation becomes the only option available to them, unless the FTA is concluded, which would include an arbitration instance under the United Nations to resolve future disputes.
The current situation poses significant challenges to the image of transparency and legality in the Honduran energy sector, which could influence future investments and the international perception of the country.
Main source:
Empresa china demanda al Estado de Honduras por $127 millones – El Heraldo.