International Arbitration Newsletter - November 2018 | Regional Overview: Asia Pacific

AUSTRALIA

Western Australia Court upholds freezing order against Duró Felguera

In a judgment dated 11 October, the Court of Appeal division of the Supreme Court of Western Australia rejected an appeal by Duro Felguera Australia against the freezing order obtained by Australian logistics company Trans Global Projects (TGP) in aid of claims it is pursuing against Duro in an Australian-seated arbitration. The US$14 million freezing order against the Spanish-owned construction company prevents Duró Felguera from disposing of the prospective proceeds of a separate, Singapore-seated UNCITRAL arbitration administered by the Singapore International Arbitration Centre  against Samsung.

EAST TIMOR

East Timor government files ICC claim on petroleum block

Timor Sea East, Timor’s National Petroleum and Minerals Authority (ANPM), has filed a US$17 million claim against a consortium led by Australia’s Oilex in a long-running dispute over the development of a petroleum block in the Timor Sea.The dispute relates to a production-sharing contract granted in 2006 to develop a petroleum block falling within the joint development area.

The consortium led by Oilex submitted a request to ANPM in 2013 to terminate the contract by mutual agreement and without penalty. East Timor then accused the consortium of being “misleading” in using the inter-state arbitration with Australia as an “excuse” for its failure to meet contractual obligations. The government said the consortium’s concerns were unfounded as all investors’ rights were “protected and grandfathered” under the Timor Sea Treaty and the production-sharing contracts.

The claim will be decided by a Singapore-seated ICC arbitration tribunal.

INDIA

Indian electric utility Reliance Power defeats ICC claim brought by NACC

Indian electric utility Reliance Power subsidiary Sasan Power has won the dismissal of a US$32 million claim in an ICC arbitration brought by NACC India, a subsidiary of the Dallas-based North American Coal Corporation.

The dispute relates to a 2009 contract to develop and operate a coal mine and power plant, known as the Ultra Mega Power Project, in Madhya Pradesh.

Reliance says the tribunal rejected NACC India’s claim of US$32 million consisting of liquidated damages, interest and legal costs. It says that pursuant to the award, Sasan Power is only required to pay outstanding invoices of US$2.3 million to NACC under the contract.

India hit by treaty claim threat from Korean Western Power Co

Korean Western Power Co (Kowepo), a subsidiary of Korea’s state-run power company, has filed a notice of dispute against India under the India-Korea bilateral investment treaty and the Comprehensive Economic Partnership Agreement (CEPA), threatening India with a US$400 million investment treaty claim over alleged breaches of a gas supply agreement.

The dispute relates to the Kowepo’s 40% stake in Pioneer Gas Power Limited, a company that operates a 388-megawatt gas-based power plant in the Raigad district of Maharashtra, in Western India. In its notice of dispute, Kowepo claims that the government’s decision to make gas available to public sector undertakings, such as the National Thermal Power Corporation, and to bar states from cancelling power purchase agreements while imposing a 50% tariff has damaged its investment

HONG KONG

Electric car start-up brings case in Hong Kong

Arising from a dispute over financing and board representation, US-based start-up Faraday Future has filed at the Hong Kong International Arbitration Centre (HKIAC) a claim for non-payment against its largest shareholder, Evergrande, the Hong Kong arm of Chinese real estate behemoth.

The HKIAC claim comes after Evergrandecame to the aid of Faraday and its founder Jia Yueting in June by entering  in to an agreement to buy a US$2 billion stake in the then floundering start-up. Additionally, Evergrande also agreed to advance US$700 million to Faraday “subject to fulfillment of payment conditions”.

SOUTH KOREA

South Korea hit by US$300 million investment treaty claim

Swiss-based elevator maker, Schindler, has filed a request for an UNCITRAL arbitration under South Korea’s 2005 investment agreement with Iceland, Liechtenstein and Switzerland, in a US$300 million investment treaty claim against South Korea.The dispute relates to Schindler’s investment in Hyundai Elevator, which it says has been damaged as a result of South Korean financial authorities’ failure to supervise capital increases made by the company between 2013 and 2015.

SRI LANKA

Sri Lanka hit by ICSID investment treaty claim on renewable energy project

Malaysian energy company KLS Energy Lanka (KLS) has filed an ICSID claim against Sri Lanka under the Malaysia-Sri Lanka bilateral investment treaty after a US$150 million renewable energy project in the country’s north was severely delayed and cancelled.

The claim is brought against the Ministry of Power & Renewable Energy (MPRE) and relates to a 20-year power purchase agreement signed in 2009 by KLS and the MPRE to invest in a 35-megawatt hybrid wind and solar power project in Sri Lanka's northern Jaffna peninsula. 

KLS claims it was prevented from finalising its designs for the plant as the electricity board had failed to deliver an interconnection proposal for the provision of electricity to the national grid. As a result, it was forced to downsize the project after the electricity board claimed that the grid lacked the capacity to accommodate the 35-megawatt plant.

Turkmenistan

Two new ICSID claims against Turkmenistan

Turkmenistan is facing two new ICSID claims. The first has been brought by Turkish construction company SECE İnşaat (SECE) under the 1997 Turkey-Turkmenistan bilateral investment treaty. The second has been filed by German construction company Unionmatex Industrieanlagen under the 1997 Germany-Turkmenistan BIT.