Seoul: The Korea Electric Power Corp. (KEPCO) and the Korea Hydro and Nuclear Power Co. (KHNP) have reached a preliminary agreement to domestically settle their legal dispute over payments involving a United Arab Emirates (UAE) power plant project, informed sources said Friday. This decision aligns with the Ministry of Trade, Industry and Resources' recommendation to resolve the issue within South Korea.
According to Yonhap News Agency, the decision was recently discussed at the companies' respective board meetings. This development comes about a month after the ministry suggested that the companies bring their case to the Korean Commercial Arbitration Board, rather than continue with the ongoing legal proceedings at the London Court of International Arbitration (LCIA).
The ministry emphasized potential cost savings, reduced litigation time, and the mitigation of risks related to the potential leaking of South Korean nuclear power plant technologies overseas. To facilitate this resolution, the ministry has also encouraged the formation of a consultative body to negotiate a settlement.
KEPCO and KHNP have been entangled in a dispute since last year over the payment of additional construction costs incurred during their joint Barakah nuclear power plant project. This project, which involved the construction of four nuclear reactors in the UAE, was South Korea's first-ever overseas nuclear power endeavor and had an estimated cost of 20 trillion won (US$13.3 billion).
In May, KHNP filed an arbitration claim against KEPCO with the LCIA, seeking reimbursement for additional expenses attributed to project delays and extra work orders, which it claims were caused by the UAE and KEPCO. Meanwhile, KEPCO is negotiating a settlement for these additional costs with the Emirates Nuclear Energy Company, which commissioned the project.
"Official transfer of the case will take place after the two companies hold consultations on the matter and complete the due procedure," a KEPCO official said.