International Arbitration Newsletter - April 2019 | Regional Overview: Asia Pacific

Cayman Islands

Cayman Islands Court upholds ICC disclosure order

The Grand Court of the Cayman Islands has rejected an application by two Cayman entities in the Essar Group to set aside a disclosure order to hand over documents relating to disposal of assets of their Mauritian affiliate Essar Steel.

This disclosure order was issued by an ICC tribunal in aid of efforts to enforce a US$1.5 billion ICC award obtained by Luxembourg-based steelmaker ArcelorMittal obtained the measures in January 2019 in support of its attempts to enforce an ICC award worth US$1.3 billion plus interest against Mauritian entity Essar Steel – which is ultimately owned by India’s Ruia family.

The award held Essar Steel liable for the repudiation of a contract to supply iron ore pellets to ArcelorMittal’s North American steel production facilities over a 10-year period. Essar Steel withdrew from the arbitration at an early stage and is now resisting its enforcement in Mauritius on the grounds that it was denied an opportunity to present its case.

China

Chinese courts allowed to order interim measures in support of Hong Kong arbitrations

The Hong Kong government and China’s Supreme People’s Court have entered an arrangement that will allow courts in mainland China to order interim measures in support of institutional arbitrations seated in Hong Kong.

Parties to an arbitration seated outside mainland China will be able to seek interim relief on the mainland. Up to now, only parties to arbitrations seated in mainland China and administered by mainland arbitral institutions could seek interim relief from a mainland Chinese court. Arbitral tribunals seated in mainland China also have no power to grant interim measures.

Under the new arrangement, parties to institutional arbitrations seated in Hong Kong may apply for interim relief from the courts in mainland China in support of the arbitration. Such relief can include the preservation of assets and evidence, or an order that parties maintain the status quo until the arbitration has been concluded.

Indonesia

UNCITRAL tribunal dismisses treaty claim against Indonesia

An UNCITRAL tribunal has dismissed a US$580 million investment treaty claim brought by Indian company Indian Metals & Ferro Alloys against Indonesia over a coal mining project on the island of Borneo.    

The tribunal upheld an objection by Indonesia that some of Indian Metals’ claims were outside its temporal jurisdiction and dismissed the remaining claims on the merits.

The proceedings were administered by the Permanent Court of Arbitration in the Hague and seated in London.

The dispute concerned a 10-year coal-mining concession on Borneo, which Indian Metals contended was worth in excess of US$1 billion. Indian Metals’ local subsidiary was granted the concession in 2009, but said it was unable to begin extraction because the concession area was found to overlap with mining concessions granted to third parties, and filed for arbitration in 2015 under the 1999 India-Indonesia bilateral investment treaty.

Singapore

Anti-enforcement injunction against Hilton hotel group lifted in Singapore

The Singapore Court of Appeal has lifted an injunction granted to an affiliate of US hotel group Hilton to prevent the enforcement of a Maldivian court judgment that was obtained in breach of an arbitration agreement.

The court lifted a permanent anti-suit injunction issued two years ago that had restrained Maldivian company Sun Travel & Tours from taking any steps in reliance on the Maldivian judgment or any decision upholding it.

The underlying dispute relates to an agreement entered into by Sun Travel with Hilton in 2009 whereby Hilton was appointed to manage a beach and spa hotel resort on the Maldivian island of Irufushi for 20 years. Sun terminated the contract in 2013, alleging that Hilton had provided misleading financial projections that had induced it to sign the agreement. Hilton filed for ICC arbitration in that year claiming for wrongful termination.

Singapore High Court upholds an ICC award in favour of a South Korean state-owned company

The Singapore High Court has upheld an ICC award in favour of a South Korean state-owned company, rejecting the grounds for setting aside the award as “spurious” and that that it obtained the award fraudulently by failing to call key witnesses or disclose certain internal documents in the arbitration. Parties to the dispute remain anonimised.

The dispute relates to a project by the South Korean government to address food scarcity by securing long-term supply lines from international sources. Tasked with spearheading the project, the state-owned company (purchaser) entered into an agreement with a food supplier in 2012 to procure food products primarily from Latin America. Both parties were required to perform their respective obligations by exercising “best commercially reasonable efforts”.

In 2013, the supplier initiated an ICC arbitration seated in Singapore alleging that the purchaser had breached the agreement by inviting it to participate in a public tender for supplying food products instead of placing orders directly under the agreement. It claimed US$2.25 million in damages plus interest.