Saipem condemned to compensate Sonatrach
The decision of the arbitrators on the LPG dispute closed with a fine of 135 million USD to the Italian group on the basis of an alleged gross negligence which Saipem denied
The ICC International Court of Arbitration has notified the parties of the decision of the arbitral tribunal in the dispute ongoing since March 2014 between Saipem SA and Saipem Contracting Algérie SpA and, on the other hand, Sonatrach, in connection with the contract for the construction in Algeria of a plant for the ‘extraction des liquides des gaz associés Hassi Messaoud et séparation d’huile’ (project LPG), entered into on 12 November 2008.
In the decision relating to the LPG arbitration the arbitrators awarded to Sonatrach – in a decision taken by majority vote – compensation in respect of a counterclaim for loss of production in an amount, including interests, of 135 million USD on the basis of an alleged gross negligence.
Saipem, who obviously denies, will review the reasons for the decision and reserves its rights in respect of any further recourse against the award.
The decision of the arbitrators to award the above-mentioned counterclaim - in the absence of a positive result in the further legal actions which Saipem reserves the right to take - will result in costs in an amount equal to such counterclaim in the 2017 financial report, costs which have not been budgeted for in the economic guidance.
The LPG arbitration – together with other 3 arbitrations ongoing between Saipem and Sonatrach (in one instance also with First Calgary Petroleums LP) – is described in detail in Saipem's Interim Financial Report 2017.