HPH fined for breach of contract
Ecuador's Attorney General, representing Manta Port Authority (APM) as plaintiff in the arbitration case taken out against companies belonging to Hutchison Whampoa Limited, has ruled that the port authority is due compensation for a breach of contract obligations by the defendants in respect of the terms and conditions related to their terminal concession.
On November 17, 2006, APM Terminals and HPH signed a concession agreement for the port's container terminal, an agreement from which the latter withdrew unilaterally on February 28, 2009.
The Attorney General has concluded that operator Terminales internacionales de Ecuador S.A. (in liquidation) has not met its obligations, since it did not transfer 5% of its shares to APM Terminals and had withdrawn prematurely and unjustifiably from its concession.
HPH has therefore been fined a total of $34.9m “for indirect damages and lost profits”. However, APM has reportedly already seized payments made as a contractual guarantee, leaving HPH to pay $27.19m. It has also been ordered to pay 50% of the arbitration costs.
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