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TECO subsidiary awarded $21 million

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TECO subsidiary awarded $21 million

by Business Observer, 20 December 2013

TAMPA — A TECO Energy subsidiary has won a $21.1 million award in a business claim against the government of Guatemala. Thursday, the International Centre for the Settlement of Investment Disputes ruled in favor of TECO Guatemala Holdings LLC in multiyear legal claim that the Republic of Guatemala was unfair in its treatment of Empresa Electrica de Guatemala SA, the largest private distribution company in Central America.

In its legal claim, the TECO subsidiary argued that in mid-2008, the Guatemalan government unilaterally reset the distribution tariff for Empresa Electrica de Guatemala to levels well below the tariffs in effect at the time. At the time, TECO Guatemala Holdings owned 24% of the Electrica de Guatemala.

The tribunal found that Guatemala’s tariff change was arbitrary and breached elementary standards of due process. In addition to the judgment, it also awarded TECO Guatemala Holdings interest (prime plus 2%) since Oct. 21, 2010, and $7.5 million in arbitration costs.

The Guatemalan government has 120 days from the date of the award to file an application for an appeal.

 source: Business Observer