Business · Companies · 3 hrs ago
UK court orders Santander to pay $90 million over Mozambique plant
A UK court ordered Santander to pay $90 million in guarantees linked to a power plant project in Temane, Mozambique.
The plant’s developer had hired Spanish engineering firm TSK to build the 450-megawatt facility under a contract worth more than €300 million.
TSK ended the contract in April 2025, saying damage from Cyclone Filipo had created a prolonged force majeure event.
The developer rejected the cancellation and asked Santander to pay the guarantees, while a court in Móstoles barred the bank from paying as the dispute continued.
The UK court ruled that the Spanish court order did not prevent payment in Mozambique and criticised Santander for not trying to lift the restriction in Spain.
The court rejected Santander’s request for four months to delay payment while it sought to change the Móstoles order.
The underlying contract dispute may still be decided through arbitration.
A UK court ordered Santander to pay $90 million in guarantees linked to a power plant project in Mozambique.
The ruling rejected the bank’s argument that a Spanish court injunction prevented it from making the payment.
The dispute began after engineering company TSK ended its construction contract, citing prolonged force majeure following Cyclone Filipo.
The project promoter rejected the termination and demanded payment under two guarantees issued by Santander.
The court said payment in Mozambique was legal and criticised Santander for not trying to lift the Spanish injunction.
- Who
- Santander, TSK and the company promoting the power plant project are involved.
- What
- A UK court ordered Santander to pay $90 million under two bank guarantees.
- When
- The ruling was issued on October 12, 2026, according to the article published the following day.
- Where
- The dispute concerns a power plant in Temane, Mozambique, and proceedings in England and Spain.
- Why
- The promoter demanded payment after TSK ended its construction contract, citing prolonged force majeure linked to Cyclone Filipo.
Santander
The project promoter
Payment under the guarantees
Santander
Santander argued that a Spanish court injunction barred payment and could expose the bank to civil and criminal liability in Spain.
The project promoter
The promoter rejected TSK’s contract termination and demanded payment under the guarantees.
Time to resolve the injunction
Santander
Santander sought a four-month suspension to ask the Spanish court to lift the injunction.
The project promoter
The UK court rejected the requested extension and said the guarantees were equivalent to cash.
TSK notified the project promoter that it was ending the contract, citing force majeure after Cyclone Filipo.
A court in Móstoles granted an injunction barring Santander from paying the guarantees.
The High Court of Justice of England and Wales ordered Santander to pay $90 million under the guarantees.
- Payment ordered
- $90 million, about €81 million
- Project location
- Temane, Mozambique
- Plant capacity
- 450 megawatts
- Contract value
- More than €300 million
- Guarantees
- Two performance guarantees issued by Santander
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