Kathmandu,
Feb. 13
The
court hearing is scheduled on February 15, 2019.
The
Bank had issued guarantees favouring Melamchi Water Supply Development Board (MWSDB)
for USD 6.62 million and Euro 1.4 million against the security of a counter
guarantee issued by the CCB on behalf of the Chinese Contractor- China Railway.
The payment of the guarantee was suspended by the Chinese Court in line with the lawsuit filed by China Railway citing breach of underlying contract between China Railway and the MWSP.
As
per the international law and practice, the guarantee provided to BOK by the
CCB is an independent and unconditional obligation of the Chinese bank and
Nepal owes to receive this money back from China as per the ICC-URDG (Uniform
rules for demand guarantees) law and practice, said BoK.
“The
non-payment of guarantee by China has resulted in a loss of public funds of
Nepal as the authorities are expected to extend a helping hand on this recovery
process,” said the bank.
It
also said that the recovery of counter guarantee amount from China could be
expedited quickly with meaningful intervention from the Government and the banking
sector regulator.
In
an effort to expedite recovery of counter guarantee amount from the China
Construction Bank (CCB), the Bank of Kathmandu (BoK) Limited has sent a team of
legal experts to China to take part in the Chinese court hearing on the case of
non-payment of Counter Guarantee issued by the latter to the BoK for the Melamchi
Water Supply Project (MWSP).
The payment of the guarantee was suspended by the Chinese Court in line with the lawsuit filed by China Railway citing breach of underlying contract between China Railway and the MWSP.
Published in The Rising Nepal daily on 14 February 2019.
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