Large Claims and Arbitration Risk in Power Generation Plant Projects and Other Large-Scale Projects
First written in FY2016. 9 of 18 entries say "Worsened", first in FY2017-Q1. Latest entry: FY2026.
Hitachi moved to the "Worse" side of this theme in 2016, 5 years before the typical company in this theme (2021).
The whole theme swung hardest in 2019: 3 of 6 companies on the "Worse" side.
0 other companies' latest entry also says "Other".
- FY2026Updated the yen conversion of the power plant claim amountAnnual report
「As of the end of the consolidated fiscal year, the damages and other claims had been changed to EUR 270 million (¥49,527 million).」
The yen-converted amount of the EUR 270 million claim related to the European power plant underperformance case was updated to approximately ¥49,527 million. - FY2025Updated the power plant claim amountAnnual report
「In December 2017, the European subsidiary received a complaint from a European customer seeking payment of EUR 263 million (¥42,634 million) in lost profits and other damages arising from the power plant's underperformance, plus interest thereon. As of the end of the consolidated fiscal year, the damages and other claims had been changed to EUR 270 million (¥43,767 million).」
The yen-converted amount of the EUR 270 million claim related to the European power plant underperformance case was updated to approximately ¥43,767 million. - FY2021-Q2MitigatedAnnual report
「On 14 September 2020, the company and Mitsubishi Heavy Industries received a decision from JCAA terminating the arbitration proceedings.」
The arbitration proceedings regarding the transfer price adjustment and other amounts related to the South African project ended, reducing the dispute exposure for that matter. However, the EUR 270 million claim related to the European power plant underperformance case remained outstanding as of 30 September 2020. - FY2020Other claims continued after settlement of the South African caseAnnual report
「On 30 March 2020, the company transferred its ¥70,000 million loan receivable from MHPS Africa to Mitsubishi Heavy Industries and paid Mitsubishi Heavy Industries ¥130,000 million, representing the settlement amount less the amount of the receivable transferred.」
The arbitration related to the South African project progressed to payment of the settlement amount, while a EUR 270 million claim remains outstanding in the European power plant underperformance case. - FY2020-Q3WorsenedAnnual report
「As of 31 December 2019, the damages and other claims had been changed to EUR 270 million (¥33,089 million).」
The damages claim related to the underperformance of the European power plant increased from EUR 263 million to EUR 270 million. - FY2020-Q3MitigatedAnnual report
「On 18 December 2019, the company decided to settle the matter from the perspectives of economic rationality and business strategy, among others, and entered into a settlement agreement with Mitsubishi Heavy Industries on the same day.」
The company entered into a settlement agreement regarding the arbitration over the transfer price adjustment and other amounts related to the South African project. Payment of the settlement amount and transfer of the MHPS shares were scheduled for March 2020 and later dates. - FY2019WorsenedAnnual report
「As of 31 March 2019, the damages and other claims had been changed to EUR 270 million (¥33,634 million).」
The claim related to power plant underperformance increased from EUR 263 million to EUR 270 million. Claims exposure in another case expanded even after the settlement of certain cases. - FY2019-Q2Settlement completed in certain disputes; claim increased in another caseAnnual report
「With respect to this action, in September 2018, the company, its European subsidiary and equity-method affiliate, and a consortium comprising the company and its European subsidiary agreed to a settlement proposal, and the settlement payments were completed in October 2018.」
In the litigation related to delays in the power plant construction schedule and other matters, the parties agreed to a settlement proposal and completed the settlement payments. Meanwhile, the claim amount in another power plant underperformance case increased by EUR 6 million, and the dispute status varies by case. - FY2019-Q1Settlement of certain disputes and updated claim amountsAnnual report
「With respect to these arbitration filings, in July 2018, the company, the European subsidiary, and a consortium comprising the company and the European subsidiary agreed to a settlement proposal, and settlement payments were completed.」
In some arbitration cases related to power plant underperformance, the parties agreed to a settlement proposal and completed the settlement payments. Meanwhile, in another case, the claim for lost profits and other damages increased by EUR 6 million in July 2018, and the dispute status varies by case. - FY2018Updated claim amounts and dispute statusAnnual report
「In addition, in December 2015, the company received an arbitration filing from the customer seeking joint and several payment of EUR 161 million (¥21,056 million) in damages and other amounts arising from the power plant's underperformance and other matters. As of 31 March 2018, the damages and other claims had been changed to EUR 101 million (¥13,299 million).」
The claim related to power plant underperformance changed from EUR 161 million to EUR 101 million, while other major disputes, including the approximately ¥774.3 billion South African business claim and the EUR 263 million claim, remain ongoing. - FY2018-Q3WorsenedAnnual report
「In December 2017, the European subsidiary and an equity-method affiliate received a complaint from a European customer seeking payment of EUR 263 million (¥35,495 million) in lost profits and other damages arising from the power plant's underperformance, plus interest thereon.」
In addition to the existing arbitration claim related to power plant underperformance increasing from EUR 161 million to EUR 163 million, a new claim of EUR 263 million was received in December, expanding the claims exposure. - FY2018-Q2WorsenedAnnual report
「In addition, in December 2015, the company received an arbitration filing from the customer seeking joint and several payment of EUR 161 million (¥21,432 million) in damages and other amounts arising from the power plant's underperformance and other matters. As of 30 September 2017, the damages and other claims had been changed to EUR 163 million (¥21,759 million).」
The arbitration claim related to power plant underperformance increased from EUR 161 million to EUR 163 million. - FY2018-Q1WorsenedAnnual report
「Subsequently, on 31 July of the same year, Mitsubishi Heavy Industries announced that, on that date, it had filed for arbitration with the Japan Commercial Arbitration Association, naming the company as respondent and seeking payment of ZAR 90,779 million, or approximately ¥774.3 billion at ¥8.53 per rand, for the transfer price adjustment and other amounts described above.」
The South African business transfer price adjustment claim progressed from ZAR 89,700 million to an arbitration claim of ZAR 90,779 million, or approximately ¥774.3 billion, further expanding the claims exposure. - FY2017WorsenedAnnual report
「Subsequently, on 31 January 2017, the company received a claim from Mitsubishi Heavy Industries expanded to ZAR 89,700 million, or approximately ¥763.4 billion at ¥8.51 per rand, for the transfer price adjustment and other amounts described above.」
The claim for the South African business transfer price adjustment and other amounts increased to approximately ¥763.4 billion. Meanwhile, the company states that the EUR 637 million award related to the European power plant project was paid in February 2017. - FY2017-Q3WorsenedAnnual report
「Subsequently, on 31 January 2017, the company received a claim from Mitsubishi Heavy Industries expanded to ZAR 89,700 million, or approximately ¥763.4 billion at ¥8.51 per rand, for the transfer price adjustment and other amounts described above.」
The claim for the South African business transfer price adjustment and other amounts increased from ZAR 48.2 billion to ZAR 89.7 billion, or approximately ¥763.4 billion. - FY2017-Q2WorsenedAnnual report
「In August 2012, the European subsidiary received a complaint from a European customer seeking joint and several payment from the company, the European subsidiary, a consortium comprising the company and the European subsidiary, and 2 other companies of EUR 1,058 million (¥120,002 million) in lost profits and other damages arising from delays in the power plant construction schedule, plus additional costs and interest thereon. The company subsequently received complaints in October 2013 and February 2016 seeking increases of EUR 239 million (¥27,148 million) and EUR 105 million (¥11,861 million), respectively, in the claims for lost profits and other damages. In addition, in June 2016, an equity-method affiliate in Europe was added as a defendant.」
For the power plant project, the disclosures include the initial EUR 1,058 million claim, increases of EUR 239 million and EUR 105 million, and the addition of an equity-method affiliate as a defendant, indicating an expansion of the claims exposure. - FY2017-Q1WorsenedAnnual report
「As of 30 June 2016, the damages claim had been changed to EUR 637 million (¥72,886 million). In addition, in December 2015, the company received an arbitration filing from the customer seeking joint and several payment of EUR 161 million (¥18,454 million) in damages and other amounts arising from the power plant's underperformance.」
The arbitration claim related to the power plant project was changed to EUR 637 million, and an additional arbitration claim of EUR 161 million related to underperformance was also disclosed. - FY2016First statedAnnual report
「On 31 March 2016, the company received a claim from Mitsubishi Heavy Industries for payment by MHPS Africa of ZAR 48,200 million, or approximately ¥379 billion at ¥7.87 per rand, as part of the transfer price adjustment and other amounts.」
In addition to the South African business transfer price adjustment claim, the company discloses claims for damages and arbitration of up to EUR 1,058 million and other amounts related to a European power plant project.