Vietnamese hydropower investor prepares to sue Chinese contractor
Vietnamese hydropower investor prepares to sue Chinese contractor
The Vinh Son – Song Hinh Hydropower JSC, the investor of the Thuong Kon Tum hydropower project, plans to bring the Chinese contractor, which stopped the implementation of the project, to the Vietnam International Arbitration Center (VIAC).
Nguyen Thuc Nghiem, a senior executive of the company, confirmed on January 12, 2015 that the company had finished preparing necessary documents to bring the case to VIAC.
Nghiem said it would take nearly one year to settle the problem.
The Chinese contractors, Hydrochina Huadong Engineering Corporation and China Railway Construction Co Ltd, unexpectedly stopped the implementation of the TKT-4.2.1 package deal, which is part of the Thuong Kon Tum hydropower project.
In July-August 2014, mass media reported that the Chinese firms had taken chief officials, technicians, machinery and vehicles back to China after giving many reasons to delay the project implementation and ask for additional expenses.
Nguyen Tai Anh, deputy general director of the Electricity of Vietnam (EVN), which holds 30 percent of stakes of the Thuong Kon Tum hydropower project, then said in local media that the Chinese contractors showed their incapability to fulfill the project as committed.
The Chinese contractors won the bid to implement the project with estimates of VND1.614 trillion, or 50 percent lower than that offered by other contractors. However, the contractors later repeatedly claimed another VND800 billion.
A source from the Vinh Son – Song Hinh Hydropower JSC said on December 25, 2014 that the company is seeking the government’s permission to apply a special mechanism to look for another contractor.
The company has completely terminated the contract with the Chinese firms, while the firms are now taking necessary steps to hand over the construction site to the investor. However, the source said the process has been going very slowly.
“Why not sue? The case must be brought to arbitrators to have the problems settled,” the source said when asked if the company was determined to sue the Chinese contractors.
“The dispute needs to be settled soon so that we can invite other contractors,” he said.
Lawyer Tran Thu Nam, an arbitrator at the Asia-Pacific International Arbitration Center, warned that as one of the involved parties is a foreign legal entity, the Vietnamese agencies handling the case may have difficulties in notifying them about their decisions.
He said the agencies would have to work with international organizations to notify the holding companies of the Chinese contractors of the decision.
Nam noted that Vietnamese investors should learn a lesson from the case when selecting contractors for large construction works.
“Chinese contractors have ill fame, not only in Vietnam, but in other countries as well,” he said.
