ICTSI seeks int’l arbitration in London for Georgia port

MANILA, Philippines - Listed port giant International Container Terminal Services Inc. (ICTSI) sought the intervention of the London Court of International Arbitration to settle a dispute with the new owners of a container, dry cargo, and ferry terminal in Georgia.

Benjamin Gorospe III, manager for corporate legal affairs of ICTSI, informed the Philippine Stock Exchange (PSE) that ICTSI’s wholly-owned Batumi International Container Terminal LLC (BICT) has initiated arbitration proceedings to settle a dispute with its lessor Batumi Sea Port Ltd. (BSP).

“BICT filed the Request for Arbitration with the London Court of International Arbitration to settle this dispute in accordance with the dispute resolution mechanism under the Lease Agreement,” Gorospe stressed.

BICT has been operating the multipurpose container terminal and the dry cargo and ferry terminal in the Black Sea Port of Batumi, Georgia under a lease agreement entered into with BSP way back September of 2007.

He explained that the lease was issued by virtue of a concession agreement that ICTSI Group entered into with Batumi Port Holdings Limited (BPHL) which had the management rights over BSP.

However, Gorospe said the group of JSC KazTransOil that controls the nearby oil terminals in the Port of Batumi bought out the interest of BPHL in BSP in 2011.

After the buyout, he said BSP sent a notice of alleged violation of the terms and conditions of the Lease Agreement by BICT.

According to him, BICT has formally responded disputing the alleged violations.

Gorospe added that ICTSI’s BICT would also apply for an injunction against BSP in the local courts of Georgia to stop the new owners from nullifying the existing lease agreement.

Data showed that BICT contributes 1.3 percent of the global volume and one percent of the total global revenues of the ICTSI Group.

In the first quarter of the year, earnings of ICTSI rose 15 percent to $41 million from $35.4 million while revenues surged 20 percent to $209.3 million from $173.8 million on the back of higher volumes amid the growing international and domestic trade.

ICTSI attributed the increase to the 12 percent rise in consolidated volume handled to 1.496 million 20-foot equivalent units (TEUs) in the first quarter of the year from 1.338TEUs handled in the same period last year.

Terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar, China, and Pakistan accounted for 79 percent of the ICTSI’s consolidated volume and 85 percent of the consolidated revenues in the first quarter.