REG - Obrascon Huarte Lain - Sidra Hospital

Obrascon Huarte Lain SAAnnouncement

03/10/2019 12:15

RNS Number : 6948O
Obrascon Huarte Lain, S.A.
03 October 2019
 


London Stock Exchange
 
Madrid, October 3rd 2019
 
 
Ref.: Notification of Significant Event: Sidra Hospital
 
 
Dear Sirs,
 
 
The company, OBRASCON HUARTE LAIN, S.A. (OHL), in compliance with current legislation, hereby reports the following:
 
 
SIGNIFICANT EVENT
By the same date the Company has been notified the decision of the Commercial Court of London dismissing the partial challenge of the fourth partial arbitration award existing between the Qatar Foundation and the Joint Venture incorporated for the construction of the Sidra Hospital by Contrack Cyprus and OHL; OHL holding 55% of this Joint Venture.
As the Company informed in its financial statements of the first semester of 2019, the Joint Venture partially challenged the fourth partial arbitration award in respect to the part where the arbitration court considered legal the termination of the construction contract with a budget amounting to 1,875 million euros as it deemed that this decision of the arbitration court was not consistent with the law.
Following the decision of the Commercial Court the parties will proceed to the discussion and justification within the scope of arbitration of their relevant economic intentions already outlined in our financial statements of the first semester of 2019, initiating the process for the calculation of the quantum. To date there is no indemnity, neither in favour nor against.
The economic total intended by the Joint Venture amounts to 348 million euros and by the Qatar Foundation to 1,134 million euros.
The arbitration court has already acknowledge to the JV 210 million euros of the 348 million euros corresponding to the executed guarantees being therefore amounts uncontested as well as 43 million euros modified unforeseen executed and unpaid.
Of the 1,134 million euros intended by the Qatar Foundation to date, no amount has been acknowledged.
Having said that it is important to highlight that:
 
-     To date there is no order to pay any amount whatsoever.
-     The decision of the Commercial Court opens up the possibility of claiming but does neither decide nor consider the accuracy of the figures claimed. The right of both parties to collect the amounts shall result from the quantum process of the court of arbitration to be defined in different partial arbitration awards.
-     From the items intended by the Qatar Foundation it seems particularly important and striking the figure of 869 million euros intended as extra costs of termination corresponding to the 5% pending of a project with a 1,875 million euros budget.
This means that the Qatar Foundation has the intention to obtain for that 5% (93.75 million euros in contract prices) an amount (869 million euros) equal to approximately 50% of the budget of the whole project (937.5 million euros).
Seen from another perspective, the extrapolation to the total of the contract of the Qatar Foundation intention will be equal to a construction budget of 17,380 million euros which represents nearly the same as the budget for the construction of 10 similar hospitals.
 
 
Yours faithfully,
 
José María del Cuvillo Pemán
Secretary of the Board of Directors
 
 




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