KEPCO, KHNP agree to resolve legal dispute over UAE plant project at home: sources

The fourth and final unit of the Korean-built Barakah Nuclear Energy Plant in the United Arab Emirates / Courtesy of Korea Electric Power

The Korea Electric Power (KEPCO) and the Korea Hydro & Nuclear Power (KHNP) have reached a preliminary agreement to domestically settle their legal dispute over payments involving a United Arab Emirates (UAE) power plant project, informed sources said Friday.

Such a decision was recently reported at the companies' respective board meetings, held about a month after the Ministry of Trade, Industry and Resources asked the companies to settle their differences at home, according to the sources familiar with the issue.

The legal case has been pending at the London Court of International Arbitration (LCIA). The industry ministry advised the companies last month to bring the case to the Korean Commercial Arbitration Board.

The ministry had cited cost benefits and a possible reduction in the litigation period, as well as the risks of Korea's nuclear power plant technologies potentially being leaked overseas. The ministry has also urged the companies to form a consultative body to hold negotiations for a resolution.

KEPCO and KHNP have been in a dispute since last year over the payment of additional construction costs incurred in their joint Barakah nuclear power plant project, under which they completed the construction of four nuclear reactors in the UAE.

The 20 trillion-won ($13.3 billion) project marked Korea's first-ever overseas nuclear power project.

In May, KHNP filed an arbitration claim against KEPCO, its parent company, with the LCIA, demanding reimbursement for the additional costs it spent on the project due to what it claims to be delays and extra work orders caused by the UAE and KEPCO.