Lopez units First PV Ventures Corporation (First PV) and First Philec Nexolon Corporation (FPNC) recently won an international arbitration against the Korean solar wafer company Nexolon Co. Ltd. First PV and FPNC initiated arbitration proceedings against Nexolon with the International Court of Arbitration of the International Chamber of Commerce (ICC) on March 22, 2012.
In an Award dated October 3, 2014, an arbitral tribunal constituted by the ICC ordered Nexolon to pay First PV around P2.09 billion as payment for its shares in FPNC, which the Award directs First PV to transfer to Nexolon upon receipt of Nexolon’s payment. The Award also ordered Nexolon to pay FPNC roughly $24.8 million in damages and pre-award interest.
The ICC Award gave Nexolon until November 2, 2014 to pay the Lopez Group units. Failure to meet the deadline would make Nexolon liable for post-award interest of 8% per annum on the sums it has been ordered to pay.
“First PV and FPNC are considering the options to pursue the enforcement of the award. Based on reports, it appears that Nexolon is currently subject to corporate rehabilitation proceedings in Korea,” First Philippine Holdings Corporation (FPH) said in a disclosure.
First PV is a wholly owned subsidiary of First Philippine Electric Corporation, a subsidiary of FPH. With Nexolon, it set up FPNC as a 70-30 joint venture company in 2011 to slice silicon wafers for the Korean firm. First PV owns 70% of the shares of FPNC.
FPNC put up a solar wafer-slicing plant in First Philippine Industrial Park in Sto. Tomas, Batangas, months before First PV and FPNC sought arbitration due to breaches by Nexolon of their Joint Venture Agreement and Wafer Slicing Supply and Services Agreement.