Troutman Pepper has advised Strabag SpA, the Chilean subsidiary of the Austrian construction firm Strabag SE, in connection with the USD 2 billion construction contract on the Alto Maipo Hydroelectric Project near Santiago, Chile since 2016. The project involves the construction of approximately 73 kilometers of tunnels through the Andes Mountains, and a two hydroelectric plants that will have a total installed capacity of approximately 531 MW.
Our team has counselled Strabag SpA in connection with numerous project related issues, including multiple financial restructurings, a U.S. Chapter 11 bankruptcy proceeding by the project’s owner (Alto Maipo), and several confidential disputes that have proceeded to international arbitration and dispute board/independent adjudicator proceedings.
Most recently, in February 2023, Strabag and Alto Maipo initiated an international arbitration against one another pursuant to the ICC Rules of Arbitration after Alto Maipo drew down the entirety of a US$ 90 million letter of credit that Strabag provided in connection with the project. The dispute surrounds Strabag’s achievement of the Project’s substantial completion, Alto Maipo’s entitlement to assess liquidated damages, and claims over responsibility to damage to the tunnel complex after several months of operation, among others. The claims in the proceeding total in excess of US$ 200 million and have led to various ancillary proceedings between the New York state courts and an ICC emergency arbitration. As part of those proceedings, As part of those proceedings, Troutman Pepper successfully secured a preliminary injunction from the New York state courts to prevent the draw from Strabag’s letter of credit . The decision is one of only a handful of instances where the New York courts have granted a preliminary injunction to prevent a draw on a letter of credit.
The team on this matter is led by partners Albert Bates and R. Zachary Torres-Fowler, and included Robert A. Gallagher, John J. Gazzola, III, Anthony J. Melon, John L. Schweder, II, Faith M. Simms, Jamey B. Collidge, Deborah Kovsky-Apap, Jason Spang, Wheaton Webb, Brielle Landis, and many others.