The decision means that ENEL will be able to capitalize the geothermal GEO and become the majority shareholder in the business it maintains with the Executive Hydroelectric Commission of the Lempa River (CEL).
According to an article in Elsalvador.com, ENEL had sued its partner for breach of contract in November 2008 because CEL had blocked a $100 million investment, which meant that ENEL went from having just over 36% the company's shares to almost 53%. "The contract, signed in 2002, provides that Enel has the right to capitalize on their investments, that is to say, investments in La Geo are transformed immediately into shares."
The problems detected could lead Cel and the Astaldi consortium, responsible for the project, to submit for international arbitration.
The faults which threaten the foundations of the dam were detected after Storm Agatha, halting all works at the site.
The Executive Committee of the Lempa River Hydroelectric Plant (Cel) and the Italian consortium Astaldi, before heading for arbitration, hired an international expert to determine who has the responsibility to cover the additional costs of a possible plant redesign.
The case was presented before an international tribunal in France, which the parties had established to settle conflicts that might arise in the preparation of the LaGeo.
Italian company, Enel, which partnered with the Salvadoran government in the operation of the LaGeo geothermic electric generating plant, took the government to court internationally for $120 million for not allowing it to hold the majority of shares that corresponds to the investments carried out, based on the contract between the two parties.