<i>Dispute resolution provisions</i>

'Article XV of the [Power Purchase Agreement] relates to the resolution of disputes. Section 15.1 contains provisions providing for the settlement of disputes by mutual discussions by the parties acting in good faith.

Section 15.2 provides for mediation by an expert. The relevant part of the section provides:

"(a) In the event that the parties are unable to resolve a dispute in accordance with Section 15.1, then either Party, in accordance with this Section 15.2, may refer the dispute to an expert for consideration of the dispute . . ."

The clause contains detailed provisions setting out the procedure to be followed in the event of a mediation under Section 15.2.

Section 15.3 related to arbitration. . . . The relevant part of this section provides:

"(a) Any Dispute arising out of or in connection with this Agreement and not resolved following the procedures described in Sections 15.1 and 15.2 shall, except as hereinafter provided, be settled by arbitration in accordance with the Rules of Procedure for Arbitration Proceedings . . ."'

<i>Arbitral tribunal's decision</i>

'The Respondent submitted that these provisions, read together, should be interpreted to mean that a mediation under Section 15.2 is a prerequisite to an application for an arbitration under Section 15.3. To put it another way, the Respondent contended that a party is not entitled to seek an arbitration under Section 15.3 until there has been a mediation by expert under Section 15.2.

I do not accept the submission in [the preceding paragraph]. It is clear by the use of the word "may" in Section 15.2 that the reference of the dispute to an expert under that section is permissive not mandatory. I do not consider that the provision in Section 15.3 [set out above] affects that conclusion. The reference in the section to the dispute ". . . not resolved following the procedures described in Sections 15.1 and 15.2 . . ." is no more than a reference to those procedures if a party has elected to invoke them. If the party has chosen not to exercise the right to refer the dispute to mediation by an expert under Section 15.2, the only consequence is that the dispute has not been resolved by the procedures described in that section. Either party is free to refer the dispute to arbitration under Section 15.3, whether or not there have been good faith mutual discussions under Section 15.1 or a reference to mediation by an expert under Section 15.2.'