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ISLAMABAD, Nov 28 (APP):The Supreme Court of Pakistan has upheld the Islamabad High Court’s 2013 ruling ordering the federal government to return a performance guarantee worth Rs 33 million, along with profit, to the private power company Spencer Powergen in a long-running dispute over a power project support agreement.
According to the officially approved detailed judgment issued for reporting here Friday, Justice Mian Gul Hassan Aurangzeb authored the order on behalf of the three-member bench, which also included Justice Munib Akhtar and Justice Muhammad Shafi Siddiqui.
Court records show that in 1994 the government issued a Letter of Support to the company for establishing a 330-megawatt private power plant. However, in 1996, amid concerns of electricity overproduction, the Economic Coordination Committee (ECC) decided that once the national capacity target of 3,000 megawatts was achieved, the bank guarantees of remaining power projects would be encashed.
The Supreme Court observed that under a corrective decision issued by the Cabinet Division on July 3, 1996, all power projects holding a valid Letter of Support as of April 15, 1996, were entitled to the return of their performance guarantees if they failed to achieve financial close—on the condition that they refrained from initiating further legal action against the government or related institutions.
The judgment noted that a 1997 report prepared by the Ministry of Water and Power—submitted by the government itself before the court—confirmed that Spencer Powergen was eligible for reimbursement under this policy.
The Supreme Court held that the High Court had merely ordered the return of the performance guarantee, which did not interfere with any contractual rights but instead ensured implementation of the ECC’s decision. The bench therefore upheld the High Court’s directive requiring the Power and Water Division and the Private Power and Infrastructure Board (PPIB) to repay the amount to the company.