Hydro Tasmania to “progress legal rights” in Basslink arbitration

Subsea cable being lowered into blue-green ocean waters (suncable tasmania)

The Standstill Agreement put in place in December last year following the arbitration outcome between Basslink Pty Ltd (BPL), the State of Tasmania and Hydro Tasmania will expire today. 

“In December 2020 the Arbitrator, Mr Robert French AC, awarded the State and Hydro Tasmania in excess of $70 million relating to the failure of the Basslink cable in 2015 and costs related to the Arbitrations,” Hydro Tasmania said in a statement.

“As part of that arbitration outcome, Mr French agreed with Hydro Tasmania’s position that the 2015 subsea cable failure was not a force majeure event and that it was instead caused by thermal overstressing arising from BPL’s operation of Basslink. 

“Mr French found that BPL was in breach of the Basslink Services Agreement. Additionally, BPL was required to undertake a number of actions to improve the operational performance of the cable,” the company said.

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“In December 2020, the State and Hydro Tasmania agreed in good faith to enter into a Standstill Agreement that preserved the rights of the parties and created a framework for negotiations to take place on commercial and engineering matters, while BPL attempted to refinance its debt and meet its commitments arising from the arbitrations. 

“In May 2021, the State and Hydro Tasmania agreed to extend the Standstill Agreement until October 27, 2021, to allow BPL more time. 

“Hydro Tasmania has acted in good faith in the hope that a resolution could be found. Unfortunately, Hydro Tasmania and BPL have been unsuccessful in reaching agreement on a resolution with respect to certain outstanding matters related to the arbitrations.

“In addition, BPL has not satisfactorily progressed the actions required to improve the cable’s operational performance and BPL has failed to pay Hydro Tasmania the costs awarded by the Arbitrator. With the expiry of the Standstill Agreement, Hydro Tasmania will now progress its legal rights.”

BPL has been approached for comment.

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