June 10 , 2020 | Investopaper
Nepal Investment Bank has won a case worth Rs 2.4 billion after 16 months. The bank has won a Tanahu hydropower case in an Italian court. After winning the case, the bank will claim more than Rs 2 billion from the Italian bank. This will further strengthen the bank’s balance sheet. For the contractor of the Tanahu hydropower project, Cooperative Muratori and Commentist (CMC), the bank had given a guarantee for the performance.
However, the company was not working as planned. After the company did not accomplish the work, Tanahu Hydro had claimed the amount of the guarantee from the bank. At the same time, the investment bank had paid the claim. CMC had filed a case in a local Italian court alleging that its bail had been forfeited. The bank had appealed after the single bench of the court initially decided against the investment bank.
Nepal Investment Bank had given performance guarantee in Nepali and Euro. The bank had given a guarantee of 851.41 million rupees and 87.49 million euros (approximately 1.19 billion rupees). The bank has already claimed the money as it has won the case. After the case is won, the money will be returned.The bank has spent around Rs 40 million to fight the case alone.
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