August 24: Bank of Kathmandu (BoK) and the Himalayan Bank have received the amount paid by a Chinese bank as a counter guarantee to the Melamchi Water Supply Project.

China Construction Bank paid USD 6,625,010 and 1,411,453 euros to BoK and USD 6,600,000 to Himalayan Bank after a Chinese high court ordered the bank to pay the amount to the Nepali banks.

Chief Executive Officer of BoK, Shravan Maskey informed that the payment was received from the Chinese bank on Tuesday.

BoK and Himalayan Bank had provided counter guarantee to China Railway which was assured the bank guarantee for the MWSP by the China Construction Bank.

MWSP had terminated the contract with China Railway after it failed to undertake the project as per the agreement. MWSP then filed a case in the Chinese court seeking the guarantee amount. The Chinese court ruled that although the Nepalese banks had provided the guarantee amount to the project, they were yet to receive the counter guarantee amount from the Chinese bank.

Earlier, China Railway had pleaded in the court that it the China Construction Company is not liable to pay the counter guarantee amount to the Nepalese banks. The two banks of Nepal then sent their representatives to China and fought a legal battle in the high court.

The People's Intermediate Court and the Henan People's High Court in Henan Province of China gave an order in favor of Nepali Bank.