TAIPEI (CNA) – Taiwan Power Co. (Taipower) and American company General Electric Co. (GE) have agreed to settle a dispute out of court involving payment for a reactor system used in Taiwan’s fourth nuclear power plant, the state utility firm said on May 30.
Taipower agreed to pay GE, which designed the plant’s reactors, US$22.50 million as part of the out-of-court settlement.
The settlement came about after Taiwan’s government announced its intention to mothball the nearly completed Lungmen Nuclear Power Plant in Gongliao District, New Taipei, in 2014, amid rising public concern about nuclear power following the Fukushima nuclear disaster in Japan on March 11, 2011.
Procedures to mothball the plant were completed in July 2015.
Since then, Taipower has stopped paying bills resulting from a contract under which GE was commissioned to build a nuclear reactor system and offer equipment and services for the Lungmen plant, also known as the fourth nuclear power plant.
The move led the U.S.-based firm to file two arbitration cases against the company at the International Chamber of Commerce (ICC) secretariat’s Hong Kong office in September 2015, when the parties failed to settle the dispute through negotiations.
The first arbitration ruling came from the ICC earlier this year, in which Taipower was ordered to pay GE a sum of US$158 million under the terms of the contract.
In the second case, yet to be ruled on, GE was seeking more than US$66 million from the state utility firm for equipment already installed at the plant.
In order to minimize the possible amount of compensation and other related legal fees, Taipower finalized an out-of-court settlement with the American firm for nearly a third of that sum, it said.
Taipower added that it has already discussed the issue with its board of directors, stressing that the settlement will not impact the company’s profitability this year nor be reflected in the electricity rates charged consumers. ●
By Tsai Peng-min and Ko Lin