A recent ruling by an international tribunal in a dispute between Guatemala and Iberdrola, sets a precedent against the claims of Teco Energy.
The U.S. Corporation Teco Energy, a former shareholder of Empresa Eléctrica de Guatemala (EEGSA), sued Guatemala before the International Centre for Settlement of Investment Disputes (ICSID), in 2010, claiming economic losses caused by a reduction in the Value Added Distribution implemented by the National Energy Commission in 2008.
For the first quarter of 2014 the Center for International Investment Arbitration could issue a ruling on the suit brought against the Guatemalan State.
This was explained by Silvia Alvarado, director of the National Energy Commission (CNEE).
The company "in 2010 went to the International Centre for Arbitration Relating to Investment Disputes (ICSID) claiming that the State gave an unfair and inequitable treatment by setting the Value Added Distribution (VAD) in 2009 at an amount less than requested by the Empresa Eléctrica de Guatemala S.A. (EEGSA), of which Teco at that time was a shareholder along with the Spanish Iberdrola " reported Elperiodico.com.gt.
The International Centre for Settlement of Investment Disputes (ICSID) of the World Bank, has ruled against the claim of the Spanish company Iberdrola against the State of Guatemala.
The lawsuit filed by Iberdrola, a major shareholder and operator of the Empresa Electrica de Guatemala (EEGSA), in late 2009, was due to a disagreement on the rate of Value Added Distribution (VAD), in force since August 2008.
TECO Energy Inc. said earnings at its subsidiary in Guatemala have been cut following actions of a Guatemalan regulatory agency.
As publish in bizjournals.com: "The subsidiary, TECO Guatemala Holdings LLC, has filed notice that it will file an arbitration claim against the Republic of Guatemala under the Dominican-Republic-Central America-United States Free Trade Agreement, or DR-CAFTA, TECO said in a filing with the Securities and Exchange Commission. In July, Guatemala’s National Electric Energy Commission unilaterally reset the distribution tariff for Empresa Eléctrica de Guatemala at levels well below the then existing tariff, the filing said. TECO Guatemala Holdings has a 24 percent interest in Empresa through a joint venture, and the action caused a “significant reduction” in earnings for the joint venture segment, the filing said."
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