Watson Farley & Williams (“WFW”) successfully represented AGC Automotive (Thailand) Co., Ltd. (“AGC”) against Renewable Energy for Thai People Co., Ltd. (“RET”) in a Thai civil court claim for breach of contract for the sale and installation of solar rooftops (the “Contract”) for a clean energy project in Amata City, Chonburi Industrial Estate, Thailand. An impressive victory was achieved for AGC who were awarded circa THB95m in damages just over a year after the claim was filed.
Japan-headquartered AGC is a world leader in the automotive and energy sectors, renowned for manufacturing various types of glass for automobiles. RET is a Thai renewable energy equipment supplier. The parties entered into an agreement for the supply and installation of solar rooftop equipment as part of AGC’s clean energy project in Thailand (the “Project”). Under the Contract, RET agreed to pay a penalty to AGC in the event that the volume of electricity produced by the solar panels installed failed to meet the minimum energy savings volumes guaranteed by RET.
As part of the Project, AGC had previously applied for, and was granted, tax privileges by the Board of Investment (BOI). However, RET’s failure to achieve the completion date previously approved by the BOI put AGC at great risk of those tax privileges being reclaimed, as well as suffering the loss of both opportunity and profits from electricity generation and energy savings generated if all installations had been completed. Despite this, it became clear the completion date would not be achieved due to the prolonged delays on RET’s part.
Under WFW’s guidance, AGC exercised its right under the Contract and at law to terminate the Contract prior to the completion date and filed a claim against RET seeking a compensation worth approximately THB130m. As part of its claim, AGC also sought, as fully entitled under the Contract, a recovery of approximately THB55m, representing the total sum paid for the Project.
In September 2024, the Court rendered its judgment, granting AGC circa THB95m in damages and all but one head of claims was granted. This judgment was a significant victory for AGC and should raise awareness to all players in the energy sector in Thailand of the extent of legal consequences of a breach of an energy contract lawfully terminated by the injured party.
The WFW Bangkok Dispute Resolution team that advised AGC was led by Partner Ratthakarn Boonnua, supported by Senior Associate Molthida Songcharoen and Associate Chanya Punjasanontachai.
Ratthakarn commented: “This is not just a fantastic result for AGC, but a significant decision that brings certainty to the Thai energy industry. Achieving such a positive decision for our client is further testament to the dedication and hard work of WFW’s Bangkok Dispute Resolution team”.
