## [International Arbitration Newsletter - March 2019 | Regional Overview: Asia Pacific](/en_GB/new/international-arbitration-newsletter-march-2019-regional-overview-asia-pacific) # International Arbitration Newsletter - March 2019 | Regional Overview: Asia Pacific 03 / 28 / 2019 - - [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.garrigues.com/en_GB/new/international-arbitration-newsletter-march-2019-regional-overview-asia-pacific) - []() - []() Previous Next **The most relevant Asia Pacific updates from the global International Arbitration and ADR practice group at Garrigues.** ### **Australia** **Poland threatened by ECT claim from Australian mining company** In early February 2019, Australian mining company **Prairie Mining** has submitted a notice of dispute to the Polish government threatening that it may bring an Energy Charter Treaty (ECT) claim against **Poland** under both the ECT and Poland’s bilateral investment treaties with Australia and the UK. The dispute relates to two mining projects in Poland: the Jan Karski mine in the southeastern Lublin province; and the Debiensko mine in Upper Silesia. The company has been pursuing an action against the Polish Ministry of the Environment since April 2018 over its failure to grant it a mining usufruct agreement over the concessions that form the Jan Karski mine. Prairie Mining says the agreement is necessary to protect its security of tenure over the project. Prairie Mining contends that state authorities have unfairly obstructed the development of two coal-mining projects. ### ### **China** **Dispute over Chinese hospital leads to SIAC award enforcement** Singaporean subsidiary **OUE Lippo Healthcare** of Indonesia’s **Lippo Group** has obtained a worldwide freezing order (Mareva injunction) from the Hong Kong High Court to enforce an award issued by tribunal administered by the Singapore International Arbitration Centre (SIAC) against Chinese businessman **David Lin Kao Kun** worth US$42 million plus interest arising from a dispute over control of a hospital in mainland China. The court has issued a *Mareva* injunction against Lin’s assets in the principal amount of the award in a dispute concerning the Wuxi New District Phoenix Hospital in the Chinese city of Wuxi, just over 100 kilometres from Shanghai. OUE Lippo acquired an indirect controlling stake in the company that runs the hospital in 2013 but alleged that Lin had later taken steps to deprive it of its shares and undermine its interests in the business. According to OUE Lippo, an entity owned by Lin successfully applied to a Shanghai court to claim ownership of 100% of the shares in the hospital’s holding company. This was on the basis of an unpaid loan dating from a time when Lin controlled both entities. OUE Lippo filed for SIAC arbitration under the share purchase agreement in early 2018, alleging that Lin had breached various undertakings. The three main heads of claim concerned the loss of its stake in the hospital; the breach of a profit guarantee; and breaches of financial warranties. **Taiwan energy company ordered to compensate GE in nuclear dispute** An ICC tribunal has ordered t**Taiwan Power Co**. (or **Taipower**) to pay **GE Hitachi Nuclear Energy**, a subsidiary of **General Electric**, USD 158 million before June 2019. The dispute concerns two nuclear reactors, costing USD 9 billion, built by GE Hitachi on Taiwan’s north-east coastline. The nuclear reactors were closed in 2014 due to public concerns about the safety of the nuclear device, especially after the occurrence of Fukushima nuclear disaster in Japan in 2011. Taipower withheld the payment to GE Hitachi and the subsidiary filed for arbitration in 2015. ### **Hong Kong** **Hong Kong court upholds Giorgio Armani anti-suit injunction against a Chinese retailer** The Hong Kong Court of First instance has upheld an anti-suit injunction obtained by Italian fashion designer **Giorgio Armani** in aid of an UNCITRAL claim against Chinese retailer **Elan Clothes** from pursuing litigation against **Armani SpA** in the courts of Shandong in eastern China. The dispute relates to a 2014 agreement under which Elan was authorised to open stores selling clothing and other products bearing certain of the Italian group’s brands, including Armani Jeans and Armani Collezioni. Giorgio Armani announced in 2017 without warning that those two brands were to be rebranded under the Emporio Armani brand, allegdly causing Elan losses including the loss of sales of Armani products already purchased before the announcement, loss of profit and loss arising from the closure or compulsory refurbishment of its stores. After Elan stopped paying royalties and advertising contributions allegedly due, Armani terminated the contract and filed a notice of arbitration under its dispute resolution clause – which provides for UNCITRAL proceedings seated in Hong Kong under the auspices of the Hong Kong International Arbitration Centre (HKIAC). ### **India** **Indian Court sets aside award against Malaysian oil company** In a recent ruling, the Bombay High Court has set aside a US$113 million award obtained by Indian state-owned company **Hindustan Petroleum Corporation Limited (HPCL**) and its subsidiary **Prize Petroleum** against **Malaysia’s M3nergy** in an ad-hoc arbitration over a failed venture to develop an offshore oil field near Mumbai, finding that there was no valid arbitration agreement between the parties. The dispute relates to a project to develop an offshore oil field near Mumbai, which was put out to tender in 2004 by India’s Oil and Natural Gas Commission (ONGC). M3nergy – a subsidiary of a development bank owned by the Malaysian state of Sabah – entered into a memorandum of understanding with HPCL and Prize Petroleum in the following year to bid for the project as a consortium, with M3nergy initially holding a 30% interest in the venture. In 2009, HPCL and Prize Petroleum issued a notice of arbitration against M3nergy, invoking the dispute resolution clause in the Joint Venture Agreement (JVA). They alleged that the Malaysian partner was responsible for ONGC’s termination of the consortium’s contract. ### **Pakistan** **Pakistan asks ICSID tribunal to re-consider corruption defence in treaty claim** **Pakistan** has filed a request at ICSID on 6 February 2019 asking the tribunal to revise an US$800 million award in favour of Turkish energy company **Karkey Karadeniz Elektrik** **(KKE)** in light of what the state says is new evidence to support its arguments that the underlying investment was tainted by corruption. The dispute relates to a claim filed by KKE, who had provided four power generation vessels under a five-year contract signed with Pakistan in 2009 to supply electricity to the port city of Karachi during a power crisis. The vessels were detained in 2012 after Pakistan’s Supreme Court ordered an investigation into whether Prime Minister **Raja Pervaiz Ashraf** had secured short-term power deals through corruption. As part of its corruption defence in the arbitration, Pakistan alleged that KKE had promised to pay US$33 million to a consultant to secure the 2009 deal. The tribunal rejected those allegations as unsubstantiated, concluding that the US$400,000 figure was “minimal for the services rendered” and constituted a “small fraction” of the total investment. In its latest filing, however, Pakistan says that the anticorruption body, the **National Accountability Bureau (NAB)** has uncovered evidence that corruption amounts to add to US$5 million through a series of offshore transactions. 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