KUWAIT CITY, May 28, (Agencies): The Kuwaiti government launched on Monday a probe into a ruling by an international arbitration ordering Kuwait to pay $2.16 billion in compensation to US Dow Chemical for a scrapped project.
The ruling was issued Thursday by the International Court of Arbitration of the International Chamber of Commerce (ICC) to whom Dow and Kuwait’s state-owned Petrochemicals Industries Co (PIC) agreed to refer the dispute.
Following days of high-level meetings, the Kuwaiti government formed a ministerial committee to “study legal and practical ways to deal with the ruling with the aim at minimising losses and damages,” said a statement after the cabinet weekly meeting.
In December 2008, the Kuwaiti government scrapped a $17.4-billion deal between PIC and Dow to create a petrochemicals joint venture due to pressure from opposition MPs citing the global financial crisis.
Under the deal, PIC was to pay $7.5 billion to form a petrochemicals firm known as K-Dow in which the two companies would have equal stakes.
The Kuwaiti government also formed a committee to investigate all aspects of the joint venture from the start to the end, especially the clause imposing the huge cost of compensation on the country.
The committee will review the negotiations, deal signing stages, and the legal procedures taken during the arbitration to establish why Kuwait lost the case, the cabinet statement said.
The committee includes the minister of finance as chairman and the ministers of justice, Awqaf and Islamic affairs and information as members to ponder over legal means to handle the recent ICC court order so as to reduce possible financial losses.
Furthermore, the Cabinet’s Fatwa and Legislation Department was tasked with compiling a report on all cases filed against all Kuwaiti authorities and companies both at home and abroad.
The cabinet also asked the Supreme Council for Planning and Development to suggest congenial mechanisms and tools to work out contracts pertinent to major projects carried out by multi-national companies for the State of Kuwait inside or outside Kuwait.
During their weekly meeting, the ministers were apprised of two messages received by HH the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah from both Turkish and Burundian leaders on bilateral relations.
The ministers also thanked Deputy Prime Minister and Finance Minister Mustafa Al-Shimali, who had recently tendered resignation, for his distinguished national role during his term of office.
The cabinet approved a draft decree forming an Competition Protection Agency board of directors, as well as a donation for setting up a new KD-1. 5-mln clinic.
Meanwhile, the ministers condemned a recent Houla massacre in Syria, which claimed the lives of scores of people, as a blatant violation of international law.
They also appreciated Kuwaiti public initiatives to raise funds for the Syrian people in order to alleviate their current humanitarian tragedy.