Fletcher Challenge Energy Welcomes Court Decision

Fletcher Challenge Energy Welcomes High Court Decision

AUCKLAND, 10 August 2000 - The High Court has ruled that Contact Energy cannot appeal a recent arbitration award made substantially in Fletcher Challenge Energy’s favour.

Fletcher Challenge Energy purchases gas from Contact for on-sale to the Taranaki Combined Cycle Station in Stratford. As a result of power outages the station was unable to take gas during certain periods in August 1998 to July 1999. Contact Energy argued that Fletcher Challenge Energy was still obliged to pay for the gas under the terms of their agreement whether they used it or not. The arbitrator ruled that the outages at the power station constituted force majeure, relieving Fletcher Challenge Energy of its purchase obligations.

Contact sought to appeal the decision of the arbitrator, but the High Court ruled that they lacked the grounds for appeal and Contact's application was dismissed.

The arbitration award and further details of the dispute remain confidential.

Fletcher Challenge Energy general manager New Zealand, Rick Webber said, he is pleased with the decision as it clarified responsibilities for both parties.

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