Australian court orders Sengkang shareholders to seek mediation

The Federal Court of Australia has ordered Australian firm Energy World Corporation Limited (EWC) and American firm El Paso to seek mediations to settle their dispute over assets in South Sulawesi.

EWC said in a statement on Thursday that the order was issued by the court during a sesion on February 23, 2006.

"As a consequence of these court orders, EWC Group members will now participate in mediation with El Paso Group members for the purpose of negotiating the terms of sale of the shares held by El Paso Group entities to EWC Group members," EWC said.

El Paso announced on August 1, 2005 that it had agreed to sell its interests in both Sengkang block and the 138-MW Sengkang gas fired power plant to a subsidiary of US power firm Globeleq Ltd.

On November 9, 2005, EWC issued claims to the Federal Court, seeking orders ultimately requiring El Paso Group to sell its interest in both assets to the former.

EWC said El Paso's decision to sell interest in Sengkang projects to Globeleq was a material breach of partnership agreement, which is required El Paso sell its interest in the projects to EWC.

"Mr. Trevor Morling QC is to be appointed mediator for the purpose of the mediation. The mediation is to be concluded before March 24, 2006. The matter is listed for further direction by the Court on March 30, 2006 at 9.30 a.m.," EWC said. (*)