Iberdrola is facing claims up to $535 million from Singapore’s Pavilion Energy over a disputed LNG supply contract from 2019, with the case ongoing in Madrid.
Bollywood Fever: Spanish utility Iberdrola is embroiled in an arbitration process with Singaporean liquefied natural gas (LNG) company Pavilion Energy, which is seeking compensation worth up to $535 million. The claims arise from a dispute over a 2019 supply contract, according to Iberdrola’s earnings report.
Pavilion Energy is demanding between $233.4 million and $534.9 million, plus interest, in compensation for what it describes as “exceptional circumstances” that have occurred since the contract was signed. Pavilion’s claim is based on an estimated loss due to these circumstances.
However, Iberdrola maintains that the contract does not include a price review clause and insists that the original terms agreed upon must prevail. “The agreement between the parties as set out in the contract must prevail,” Iberdrola stated.
A spokesperson for Iberdrola declined to provide further comment, and Pavilion Energy did not immediately respond to requests for comment outside regular business hours in Singapore.
The arbitration case is currently underway in Madrid and is governed by Spanish law. The specific amount Pavilion Energy is claiming will be determined during the proceedings, Iberdrola noted.
In a related development, Shell agreed to acquire Pavilion Energy from global investment firm Temasek in June, which may influence the dynamics of the ongoing arbitration.
This high-stakes dispute underscores the complexities and potential financial risks involved in long-term LNG supply contracts, particularly in a volatile energy market.
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