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Court Dismissed PetroTrans’ Compensation Claims


The Geneva based Arbitration Tribunal, operating under the auspice of the International Court of Arbitration of the International Chamber of Commerce- rejected all of PetroTrans’ claims of unlawful termination of the Calub and Hilala Gas fields’ appraisal and development agreement  signed with the Ethiopian Ministry of Mines in July 2011.

The Ministry of Mine says winning a legal claim against PetroTrans would set a precedent and could be seen as a wake-up call for other mining firms in Ethiopia to discharge their duties and responsibilities properly, The Daily Monitor reported.

The case, which also includes termination of other four agreements between the Ministry of Mine and the Hong Kong based company, took three years to end in favor of the Ethiopian Government.

The Ministry said the Tribunal unanimously awarded victory to Ethiopia on January 18, by dismissing PetroTrans’ claim which included compensation in the amount of USD 1.4 Billion.

The Ministry of Mines was represented by Addis Law Group, a Washington D.C based firm specializing in arbitration, in collaboration with another D.C based office of Greenberg Traurig.  PetroTrans was reportedly represented by two prominent firms, Norton Rose Fulbright, but later shifted to Lalive.

“We were forced to dismiss the agreement with PetroTrans because they did not do any of the jobs that were enlisted in the agreement including providing the loan 3 Billion USD,” said the Minister.

Poly-GCL, the Chinese company that took over all the five blocks recently announced that it is making significant progress in the Calub and Hilala gas fields appraisal activities.

The Ministry says the two fields in the south-east Ogaden Basin have reserves of 4.7 trillion CU feet of gas and 13.6 million barrels of associated liquids. The deposits were discovered in the 1970s but have not yet been exploited.