Sinolam Files Lawsuit Against AES Corporation Over Alleged Market Monopolization
In a significant legal move, Sinolam LNG Terminal, S.A. and Sinolam Smarter Energy LNG Power Co. have filed a civil lawsuit against AES Corporation (NYSE: AES) in the Circuit Court for Arlington County, Virginia. The lawsuit accuses AES and its partners, including InterEnergy Holdings (UK) Limited, of engaging in a systematic effort to exclude Sinolam from Panama’s liquefied natural gas (LNG)-to-power market, which is experiencing rapid growth.
Allegations of Unfair Business Practices
The civil action alleges that AES and its partners employed coercive tactics and confidential information misuse to undermine Sinolam's LNG projects in Panama. The lawsuit claims that this coordinated effort was aimed at achieving monopoly control over critical components of the energy supply chain, including LNG importation, storage, and regasification.
- AES allegedly took steps to dismantle Sinolam's LNG power generation projects.
- Coercive measures included undue influence over government regulators.
- Sinolam's LNG terminal projects faced systemic delays and denials of permits.
Sinolam’s LNG Project Overview
Sinolam claims to have lawfully secured necessary regulatory approvals and power purchase agreements for a major LNG power plant and terminal in Colón, Panama. The company intended to leverage Panama's status as an emerging LNG hub, particularly after the Panama Canal's expansion.
However, the lawsuit indicates that AES perceived Sinolam's advancements as a competitive threat. After failed negotiations, AES allegedly transitioned from competitive dialogue to exclusionary practices against Sinolam.
InterEnergy's Alleged Misconduct
Additionally, the lawsuit implicates InterEnergy in unlawful actions by using Sinolam’s confidential information—a direct violation of their non-disclosure agreement. This information was reportedly used by InterEnergy to form a joint venture with AES, further sidelining Sinolam and its customers from the market.
As a result of these actions, Sinolam asserts that its long-term contracts were rendered worthless, leading to billions in lost economic value.
Government Influences and Market Control
The complaint also raises concerns about potential government manipulation, alleging that AES leveraged political connections to gain regulatory advantages. This influence purportedly expedited approvals for AES-backed projects while revoking essential licenses for Sinolam.
Importantly, the lawsuit highlights that the Panamanian government holds significant shares in AES's local subsidiary, AES Panama S.R.L., which calls into question the integrity of the regulatory decisions made.
Claims and Compensation
The lawsuit presents ten claims, including tortious interference and statutory conspiracy, advocating for compensatory damages exceeding $4 billion. Sinolam contends that this case represents a fight for fair competition and adherence to legal standards within the energy market.
"What we allege is a coordinated effort by powerful incumbents... to shut down a competitor rather than compete on the merits," stated Kenneth Zhang, CEO of Sinolam.
About Sinolam
Sinolam LNG Terminal, S.A. and Sinolam Smarter Energy LNG Power Co. specialize in developing energy infrastructure that targets LNG-to-power solutions in emerging markets. Their projects aim to provide reliable electricity while enhancing access to competitively priced natural gas in Panama and the surrounding region.