## [International Arbitration Newsletter - May 2019 | Regional Overview: Asia Pacific](/en_GB/new/international-arbitration-newsletter-may-2019-regional-overview-asia-pacific) # International Arbitration Newsletter - May 2019 | Regional Overview: Asia Pacific 05 / 24 / 2019 - - [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.garrigues.com/en_GB/new/international-arbitration-newsletter-may-2019-regional-overview-asia-pacific) - []() - []() Previous Next **The most relevant Asia Pacific updates from the global International Arbitration and ADR practice group at Garrigues.** ### **CHINA** **US court confirms HKIAC award that in solar IPO case** The US District Court for the Southern District of New York entered a default judgment worth nearly US$14 million against Chinese national **Weili Su** and his British Virgin Islands-registered company **Flash Bright Power** after they failed to appear, confirming an UNCITRAL award rendered last year in favour of three Chinese former employees of **Sky Solar** – a Cayman-registered solar power park operator founded by Su and in which Flash Bright held a controlling interest. The arbitration was seated in Hong Kong and administered by the Hong Kong International Arbitration Centre (HKIAC). The former employees – **Shengkang Fei, Richard Yuqiang Lu**, and **Ranran Xu** -acquired minority interests in Sky Solar pursuant to a 2010 shareholders’ agreement governed by New York law. The agreement provided that Sky Solar would “use its commercially reasonable best efforts” to pursue an initial public offering on the NASDAQ securities exchange in New York. Su and Flash Bright were to be liable in the event Sky Solar did not meet its obligations. The claimants alleged that in 2013, Su “clandestinely” incorporated a new company, Sky Power Group, as a wholly owned subsidiary of Sky Solar and effected a one-for-one share swap whereby shareholders owning almost 95% of the Cayman company exchanged their shares for an equivalent interest in Sky Power. ### **KOREA** **US companies file ICC claim in Korean smart city dispute against Korean partner** Two Delaware companies owned by US family-owned real estate business **Gale Investments** have launched a Singapore-seated ICC arbitration against Korean entity **Posco Engineering & Construction** – which is jointly owned by Korean steelmaking group Posco and a Saudi Arabian sovereign wealth fund- over a US$35 billion project to build a sustainable city near Seoul. The dispute relates to a joint venture to develop the “smart city” of Songdo International Business District .Gale and Posco formed a joint venture to develop the project in 2002. The Gale entities own a roughly 70% interest in the joint venture vehicles. Posco E&C owns the remaining interest and is also the primary construction contractor for the project. According to Gale, Posco E&C has abused its dual position and embarked on a “calculated plan” to oust its US partner from the project entirely. ### **PHILIPPINES** **ICC tax dispute award rendered in favour of Shell and Chevron subsidiaries against Philippines** An ICC tribunal held that **Philippines** was not entitled to recoup the back-taxes on revenue from an offshore gas field it claimed from **Shell Philippines Exploration** and **Chevron Malampaya**. The dispute concerns revenue from the Malampaya gas field, which is run by a joint venture with Shell and Chevron holding a 45% stake each and the remaining 10% share being held by the state-owned Philippine National Oil Company. Under a 1990 service contract with the government, the Malampaya consortium is exempt from all taxes except income tax. It is entitled to 40% of the net proceeds of production, with 60% to be remitted to the government through its department of energy. The dispute broke out in 2015, when the Philippine Commission on Audit – a body that oversees public finances – decided the department of energy’s practice of sourcing the consortium’s taxes from the government’s share of the proceeds was an unlawful tax exemption. ### **SINGAPORE** **Singapore considers allowing appeal on questions of law in arbitration** The **Singaporean government** is considering allowing parties to appeal to the courts on questions of law arising out of an arbitration award, as long as the parties have agreed to opt into such a mechanism. In a written answer to a parliamentary question regarding whether the ministry would consider providing an avenue of appeal to the city-state’s courts where it is alleged there are “errors of law” in the award, the ministry considered that it was currently reviewing the International Arbitration Act (IAA) and that one of the amendments under consideration will allow parties to appeal to the courts on questions of law arising out of an arbitration award, provided that they have agreed to contract in or opt in to this mechanism. Such appeals could be heard in the Singapore High Court. ### **VIETNAM** **Vietnam ordered to pay US$45 million including moral damages to Dutch national** An UNCITRAL tribunal has ordered **Vietnam** to pay US$45 million including moral damages and costs to **Trinh Vinh Binh**, a Dutch national of Vietnamese origin, and his company **Binh Chau JSC**, in a claim filed under the Netherlands-Vietnam bilateral investment treaty. Binh and his company have been awarded US$27.5 million for the expropriation of his properties and a further US$10 million in moral damages. The claim relates to Vietnam’s alleged breach of a settlement that brought an end to a prior UNCITRAL claim by Binh under the same BIT. In 1996, Binh was arrested by Vietnamese authorities for violating laws concerning bribery and the purchase of property by international residents. Two years later, he was sentenced to 13 years in prison (reduced to 11 years on appeal) as well as being fined and stripped of his assets. He also claimed the state tortured him prior to a show trial used to justify the seizure of his property. 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