Arbitration Peru

Kenon Receives $93 Million from Republic of Peru in ICSID Arbitration Award Payment

By ADR Journal Editorial Desk Published 1 source Arbitration Award Enforcement ICSID Investment Disputes Peru Peru

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TL;DR

  • Kenon Holdings received approximately $93 million from the Republic of Peru.
  • The payment relates to an ICSID arbitration award issued in October 2023.
  • The total award paid by Peru was about $203 million, with Kenon receiving its share after expenses and capital provider allocation.
  • The payment finalizes the matter between Kenon and the Republic of Peru.

Overview

Kenon Holdings Ltd. has announced receipt of approximately $93 million from the Republic of Peru as payment for an ICSID arbitration award. The award, issued in October 2023, resolves an investment dispute between Kenon and Peru, with the full payment now completing the proceedings.

What Happened

The Republic of Peru paid approximately $203 million to satisfy an arbitration award rendered by an ICSID tribunal in favor of Kenon Holdings and IC Power.

Kenon's share of this payment, after deduction for a capital provider's portion and other expenses, is about $93 million, subject to tax.

The ICSID award included $110.7 million in damages and $6.4 million in fees and costs, with additional amounts for interest, following dismissal of Peru's annulment application.

Kenon and IC Power had an agreement with a capital provider covering arbitration expenses, entitling the provider to a share of the proceeds.

Context

The arbitration arose from an investment dispute between Kenon Holdings (and IC Power) and the Republic of Peru. The ICSID tribunal issued its award in October 2023.

The proceedings included Peru's unsuccessful application to annul the award, as well as prior disclosure of third-party funding arrangements for the claimants.

Why It Matters

  • The full payment of the ICSID arbitration award by Peru concludes the dispute and demonstrates enforcement of major investor-state arbitral awards.
  • Kenon's receipt of $93 million, after deductions, highlights the use of capital providers in funding significant arbitration claims.

Sources

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