FOR IMMEDIATE RELEASE
3 December 2003
Contact Energy announced today that it has received a decision from the arbitrator who heard a dispute between Contact and a contractual counterparty. Contact is not able to name the other party due to confidentiality restrictions.
The dispute related to conflicting interpretations over agreements between the parties, and the other party sought a substantial sum in damages from Contact. Whilst Contact believed that it could successfully defend this claim, it made a provision of $5 million for disputes with this party in the financial statements for the year to 30 September 2003 to reflect litigation risk.
In the decision received today, the arbitrator has made an award of $8 million in favour of the other party, and has reserved his judgement on costs.
Commenting on the outcome, Contact’s Chief Executive Mr Stephen Barrett said “we are obviously disappointed with the award against Contact. Whenever contractual disputes arise, there is always a degree of litigation risk to take into account.”
“Contact will carefully study the determination, and we expect to make a decision shortly on whether we will seek to appeal the award.”