Announcement • Jul 04
Shanghai Electric Group Company Limited Announces Progress of Material Arbitrations
Shanghai Electric Group Company Limited and The Stock Exchange of Hong Kong Limited took no responsibility for the contents of this announcement, made no representation as to its accuracy or completeness and expressly disclaimed any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. References were made to the voluntary announcements of the Company disclosed on December 17, 2019, December 30, 2021, December 14, 2022, May 28, 2023 and February 1, 2024 in relation to the arbitrations of Shanghai Electric Group Company Limited involving the project of Sasan 6*660MW Ultra Large Supercritical Coal-fired Power Station in India. In June 2008, the Company and Reliance Infra Projects (UK) Limited entered into the Equipment Supply and Service Contract, with a contracted amount of USD 1,311,000,000, pursuant to which, the Company (as the supplier) shall provide major equipment and relevant services for the Project, Reliance Infrastructure Limited issued the letter of guarantee for the payment obligations of Reliance UK under the Contract, and Sasan Power Limited owned and operated the power station. Since Reliance UK still failed to pay for the equipment purchased and other relevant payables to the Company after the Project commenced commercial operation for several years, the Company filed an arbitration application with the Singapore International Arbitration Centre in December 2019, requiring Reliance to pay for equipment purchased and other relevant payables in the amount of at least USD 135,320,728.42 to the Company as agreed in the letter of guarantee issued by Reliance for Reliance UK. In December 2021, the Company received a notice of acceptance for an arbitration brought by Reliance UK against the Company issued by the Singapore International Arbitration Centre, pursuant to which Reliance UK requested the Company to compensate it for losses of approximately USD 388.75 million related to the Contract; Reliance UK also believed that the letter of performance guarantee was unreasonably released and requested the Company to issue a letter of performance guarantee in the amount of approximately USD 120.175 million to guarantee its claims. In December 2022, the Company received the award issued by the Singapore International Arbitration Centre for the First Arbitration, which ordered Reliance to pay the sum of USD 146,309,239.27 to the Company. In May 2023, the Company received a notice from Singapore International Commercial Court that Reliance has filed an application to the Singapore International Commercial Court seeking to have the award for the First Arbitration by the Singapore International Arbitration Centre set aside. The application was accepted by the Singapore International Commercial Court. In January 2024, the Company received a notice from the Singapore International Commercial Court that the Singapore International Commercial Court had entered a judgment, rejecting Reliance’s application to set aside the award for the First Arbitration and also ordering Reliance to pay to the Company the litigation costs related to this case. On June 30, 2026, the Company received the award issued by the Singapore International Arbitration Centre for the Second Arbitration, which dismissed all substantive claims brought by Oxagon Enterprises Limited (formerly Reliance UK, hereinafter referred to as Oxagon). The dismissal carries preclusive effect, and the Company prevailed in the case. The specific award is as follows: All claims brought by Oxagon, other than claims for costs, are dismissed with prejudice. This dismissal carries preclusive effect. Oxagon is precluded from commencing any subsequent arbitral or court proceedings against the Company in respect of the same or substantially similar claims; The dismissal is not a determination on the substantive merits of Oxagon’s claims other than claims for costs, most of which are governed by English law. No findings are made on the underlying contractual disputes; This award is issued concurrently with a termination order under Article 32(2)(c) of the UNCITRAL Model Law on International Commercial Arbitration, which formally terminates the arbitral proceedings on the ground that continuation of the arbitral proceedings has become unnecessary or impossible; Oxagon is ordered to forthwith pay the Company USD 1,278,442.00 in legal costs and expert costs; The Company is ordered to forthwith pay Oxagon SGD 92,382.19 in relation to the costs of the arbitration; Save as expressly provided in this award, all other claims and requests for relief are dismissed with prejudice. As the awards of the First Arbitration and the Second Arbitration has yet to be enforced, there is still uncertainty about the impact on the Company’s current or subsequent profits. The Company will carry out corresponding accounting treatment according to the requirements of relevant accounting standards and actual conditions, based on the progress and results of enforcement. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.
