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

China

ICSID tribunal confirms denial of provisional measures against China

An ICSID tribunal has confirmed the denial of provisional measures sought by a spice manufacturing business against China, ruling that there was no right that requires interim protection.The tribunal hels that the claimant, German investor Hela Schwarz, had submitted its urgent provisional measures request asking that China be restrained from enforcing a decision to expropriate its premises in the city of Jinan, on 4 December 2017 before it had been constituted. Demolition of the evacuated premises by the Jinan municipal government began on 6 December and was largely complete by the second week of December 2017.The tribunal said, “the fundamental requirement for provisional measures is that such measures can only ever be warranted in circumstances in which the need for such measures is urgent and the measures in contemplation are necessary, inter alia, to prevent imminent harm to a party”, to deny the claim.

India

India's parliament debates arbitration and jet row

India’s lower house of parliament has passed a bill to change and clarify arbitration legislation that came into force three years ago – with one parliamentarian using the debate to suggest that a political storm over a €7.5 billion deal for the acquisition of fighter jets may lead to the biggest Indian arbitration since the Bhopal gas tragedy.

India hit by billion-dollar case over gas migration

India has been recently hit by a US$1.7 billion UNCITRAL dispute accusing the Indian Government of profiting from gas that had allegedly migrated from adjacent state-owned fields.Reliance and Canada’s Niko Resources – who are partners with BP in the block –announced recently that a tribunal had completely rejected India’s claims by a 2-to-1 majority.The companies say the majority upheld all their contentions, finding that the consortium was entitled to produce all gas from its contract area. India was ordered to pay US$8.3 million in costs.

Kazakhstan

Enforcement proceedings against Kazakhstan reach end in England

A pair of Moldovan businessmen have been allowed to discontinue proceedings to enforce a US$500 million Energy Charter Treaty award against Kazakhstan, which the state claims was obtained fraudulently, in England – on condition that they consent to an original order allowing enforcement being set aside and do not seek to enforce in the jurisdiction again. The Court of Appeal ruled that Gabriel and Anatolie Stati could abandon the London enforcement proceeding provided they gave these undertakings offered by them to Mr Justice Knowles at first instance.The court made this ruling on the basis that there is now no prospect of the Statis enforcing in England and Wales so a trial of the fraud allegations raised by Kazakhstan as a defence to enforcement was not justified.

Pakistan

Pakistan hit by ICC decision holding it liable for gas supply failures

Pakistani state-owned gas company Sui Southern Gas Company has reportedly been found liable to a US-Pakistani entity Habidullah Coastal Power Company (HCPC) in a Singapore-seated ICC case, for failing to meet supply obligations for a plant in the city of Quetta. This news comes only 4 months after Pakistan’s largest independent power producer brought another ICC claim on April 2018 against the country’s government and two state bodies after it was hit with a US$240 million penalty for not providing enough electricity.

South Korea

HKIAC to administer treaty claim against South Korea

A US citizen has filed a claim against South Korea at the Hong Kong International Arbitration Centre.

The US$3 million claim was filed by US citizen Set Jin-hye under the US-Korea Free Trade Agreement and the 2013 UNCITRAL rules, according to a brief announcement published by the Korean Ministry of Foreign Affairs last month.The announcement says the claim filed on 12 July 2018follows a notice of intent issued by the claimant in September 2017 and concerns an alleged expropriation of property, but no further information is given.

Uzbekistan

Calunius Capital Fund seeks to enforce award in the US against Uzbekistan

An affiliate of third-party funder Calunius Capital has applied to a US court to enforce a US$13 million investment treaty award against Uzbekistan – while the mining company that assigned the award tries to revive a billion-dollar claim.Guernsey-registered Gretton Limited lodged a petition on 27 July 2018 with the US District Court for the District of Columbia to enforce the UNCITRAL award, which was issued in December 2015 in a dispute between UK mining company Oxus Gold and Uzbekistan. Gretton is bringing the action in its capacity as Oxus’ assignee.Formerly listed on the London Stock Exchange, Oxus was established in 2000 as a precious metals mining company whose principal business was its investment in Amantaytau Goldfields , a joint venture with the Uzbek government.

Vietnam

Vietnam hit by Treaty claim brought by Conoco and Perenco

Energy multinationals ConocoPhillips and Perenco have brought an UNCITRAL investment treaty claim against Vietnam under the UK-Vietnam Bilateral Investment Treaty to prevent the state from collecting an estimated US$179 million capital gains tax related to a billion-dollar acquisition.The case follows the sale in 2012 of two companies owned by a UK subsidiary of US energy giant ConocoPhillips – ConocoPhillips Gama Ltd, and ConocoPhillips Cuu Long. They were sold to a UK company owned by the Anglo-French oil firm Perenco. It appears from corporate accounts that the only assets held by ConocoPhillips Gama and Cuu Long were Conoco’s oil interests in Vietnam. According to accounts filed at Companies House in the UK, ConocoPhillips sold the companies for $1.3bn, reaping a profit of $896m. Buried in the detail of those accounts, a small note states that the company paid no taxes on the capital gain.