The arbitration tribunal at The Hague awarded the AIM-quoted power firm US$35.5mln in compensation, and a further US$5.5mln of unpaid dividends are also owed.
The ruling upheld Rurelec’s claim that Bolivia’s expropriation of the company’s 50.001% interest in Empresa Guaracachi in May 2010 breached a bilateral investment treaty between the UK and Bolivia. As such the tribunal found that the expropriation was unlawful.
According to the rules of the United Nations Committee on International Trade Law the tribunal’s award is final and binding.
Rurelec is confident that Bolivia will comply with its obligations, and says it looks forward to a prompt settlement.
Although the award falls short of the independent valuation of the claim which, as reported by Rurelec last year, was estimated at US$142mln, it will provide a significant cash boost for the company.
Once paid, the award draws a line under a difficult period for the group which is now set for new period of investment and growth, having refocused in the wake of the forced exit from Bolivia.
Focusing on Peru and Chile, whilst continuing existing operations in Argentina, the company plans to roll out new gas-fired power generation as well as hydro-power projects.
Investors will now await news of Bolivia’s payment and can anticipate more forward looking matters, rather than dwelling on the difficult recent past.