Insurers Seeking To Avoid Payout On Brazil's Jirau Dam -Report
March 13 2012 - 9:50AM
Dow Jones News
Insurers of Brazil's Jirau hydroelectric dam are refusing to pay
claims on as much as 1 billion Brazilian reais ($550 million) in
damages that resulted from a workers' protest last year, the Estado
de S. Paulo newspaper reported Tuesday.
The insurers claim that because the protest was political in
nature they are not required to fully cover the damages, according
to the paper.
Workers at the Jirau dam being built in Brazil's Amazon River
basin last year set fire to their temporary lodging and the buses
that transported employees to and from the work site in protest of
work conditions and pay. The insurance companies allege that the
protests were "politically motivated," limiting the level of
damages that are covered by the BRL7.3 billion insurance policy,
Estado reported.
But lawyers for Energia Sustentavel, the group building and
operating the dam, say that the fires were a criminal act and
should be fully covered by the insurance companies, Estado
said.
Reinsurers of the original insurers in Brazil--which include
SulAmerica, Allianz SE (ALIZF, AZSEY, ALV.XE), Mapfre SA (MAP.MC),
Itau Seguros and Alianca do Brasil--have asked a London arbitration
panel to resolve the case, even as two lawsuits work their way
through the courts in Brazil, Estado said.
According to lawyers for Energia Sustentavel, the reinsurers are
pursuing a resolution through the London arbitration group Arias
because the group was founded by insurance companies, Estado
said.
The construction companies are worried that Arias will defend
the interests of insurance companies in their decisions, Estado
said. Ernesto Tzirulnik, a lawyer representing Energia Sustentavel
and construction company Camargo Correa, asked that the case be
decided in Brazil because the contracts with insurance companies
were signed in Brazil, Estado said.
-By Paulo Winterstein, Dow Jones Newswires; 55-11-3544-7073;
paulo.winterstein@dowjones.com
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