The International Court of Arbitration of the International Chamber of Commerce has directed SunPower Philippines Manufacturing Ltd. to pay First Philippine Electric Corp. and First Philec Solar Corp. of the Lopez Group some $55.5 million for alleged breach of supply contract.
First Philec and FPSC filed a request for arbitration of their dispute with SunPower Philippines, the local unit of US-based SunPower Corp., with the International Court of Arbitration of the International Chamber of Commerce in 2012.
FPSC is a joint venture established by First Philec and SunPower to slice silicon solar wafers for SunPower.
The two Lopez-controlled companies accused SunPower of breaching an agreement covering silicon solar wafer services. Solar wafers are used for the installation of solar plants.
“First Philippine Holdings Corp. has been advised that a partial award dated 28 January 2015 has been rendered in the International Chamber of Commerce arbitration proceedings brought by First Philec and FPSC against SunPower Philippines,” First Philippine Holdings said in a disclosure to the stock exchange Thursday.
The arbitration panel ordered SunPower to purchase First Philec’s shares in their joint venture for $30.3 million and pay First Philec $25.3 million, representing compensation for wafers produced and for unpaid silicon solar wafering services.
First Philippines said the partial award found SunPower Philippines to be in material anticipatory breach of obligations to FPSC under the supply agreement for silicon solar wafering services between FPSC and SunPower.
The court also found SunPower to be in material breach of its obligations to First Philec under the joint venture agreement between First Philec and SunPower.
First Philec inagurated its wafer slicing facility at First Philippine Industrial Park in Sto. Tomas, Batangas in June 2008. The plant is the first large-scale silicon wafer-slicing company in the Philippines.
The court ordered SunPower to purchase First Philec’s shares in FPSC for $30.3 million by Feb. 2, 2015 or such other date as the parties might agree or the tribunal might direct and within 14 days of the transfer of the shares from First Philec to SPML, pay FPSC the net sum of $25,239,860.
The amount represents compensation for wafers not taken by SPML and for unpaid silicon solar wafering services under the supply agreement.
“The transfer of shares to SPML and the price of the shares are potentially subject to further orders which may be given by the tribunal in due course in one or more future awards, which will also deal with the matter of which party or parties will be responsible for the costs of the arbitration,” First Holdings said.