Deminor’s client is a European company who entered into several EPC and O&M contracts with a leading energy company. The Respondent did not comply with material obligations under the contracts, and those contractual breaches triggered liquidated damages of over USD 24 million.
Therefore, arbitration proceedings were commenced before the Santiago Arbitration and Mediation Center of the Santiago Chamber of Commerce under Chilean law.
The client company did not lack resources to pay for the arbitration proceedings, but they had other priorities for their cashflow. This is an increasingly common rationale for corporates looking at funding. Companies have many demands on their resources, and they do not necessarily want to lock up a significant part of their available capital on one specific dispute over a period of years.
Deminor was able to craft attractive commercial terms for the client which still provide for a satisfactory return for Deminor, in case of a win. Deminor drew on its ability to communicate and transact in English, German, and Spanish to work with the client on reaching an agreement that worked for all parties.
Funding can be a very useful tool for companies which have been financially harmed by the actions of a contractual counterparty. With the funding provided by Deminor, the claimant was able to pursue its rightful claim against the party that breached the contracts, without having to lock up a significant part of their available capital on a dispute which will last a few years.