## [International Arbitration Newsletter - October 2020 | Regional Overview: Asia Pacific](/en_GB/new/international-arbitration-newsletter-october-2020-regional-overview-asia-pacific) # International Arbitration Newsletter - October 2020 | Regional Overview: Asia Pacific 10 / 26 / 2020 - - [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.garrigues.com/en_GB/new/international-arbitration-newsletter-october-2020-regional-overview-asia-pacific) - []() - []() Previous Next **The most relevant Asia Pacific updates from the global International Arbitration and ADR practice group at Garrigues.** ### **CHINA** **“SIAC in Shanghai” clause supported by Shangai Court** In August 2020, the Shanghai No.1 Intermediate People’s Court confirmed the validity of the Singapore International Arbitration Centre (**SIAC**) arbitration “in Shanghai” clause contained in the contract concluded by Korea-based **Daesung Industrial Gases** (**DIG**) and a Chinese affiliate of US-based **Praxair**. The contract provided that the governing law was Chinese law, while the dispute arising therefrom shall be submitted to the SIAC “for arbitration in Shanghai”. In 2016, DIG filed a SIAC claim against Praxair. Praxair opposed the jurisdiction of the arbitral tribunal on the grounds that Chinese law prohibits foreign arbitration institutions from administering cases seated in mainland China. In July 2019, Praxair’s opposition was rejected by the Singapore High Court, which held that Singapore shall be the seat while Shanghai should be regarded as a choice of hearing venue. However, the Singapore Court of Appeal overturned the judgment of the Singapore High Court in October 2019 and ruled that the seat of arbitration shall be Shanghai but refused to define the validity of the arbitration clause, for which DIG applied to the Shanghai court afterwards. The Shanghai court has now ruled that the arbitration agreement is valid based on the reply letter issued by the Supreme People’s Court of China in a 2013 case, which confirmed that either party in a foreign-related contract can pursue arbitration with a foreign arbitration institution with a seat in China. Furthermore, the Shanghai court stated that there is no normative instrument that explicitly prohibits non-Chinese arbitration institutions from administering arbitration procedures in mainland China, and that such prohibitions would go against the mainstream trend of international commercial arbitration. **BIMCO adds Hong Kong as the fourth named arbitration venue to its new shortened arbitration clause** In May 2020, the Baltic and International Maritime Council (**BIMCO**) added Hong Kong as the fourth named arbitration venue, after London, New York and Singapore. More recently, BIMCO has added Hong Kong to the new shortened arbitration clause, which is available at [this link](https://www.bimco.org/contracts-and-clauses/bimco-clauses/current/law-and-arbitration-clause-2020-hong-kong). In this updated version of the shortened arbitration clause, users only need to select the governing law and arbitration applicable to the contract, and then the locations, applicable terms, rules and procedures, and small claims clauses will be matched instantly. As same as that in the previous version, both parties can choose and add applicable laws and arbitrations independently beyond the named venue. One of the key changes in the updated version is that both parties are required to provide effective contact information to receive service messages related to the arbitration, so as to effectively follow up and deal with changes in the execution of the contract and modify them in time. The mediation clause that previously formed part of the clause has been removed and will be provided as a freestanding clause in the BIMCO clauses library. Since Hong Kong became the fourth designated location of BIMCO, the Hong Kong Arbitration Ordinance and the Hong Kong Maritime Arbitration Group Terms recommended in the model clauses have been applied to relevant arbitration procedures. ### **INDIA** **Vodafone prevails in multi-billion dollar tax dispute** In the high profile tax dispute between **India** and **Vodafone International Holdings** (**Vodafone**), the Dutch subsidiary of the British telephone company **Vodafone**, an arbitration tribunal has held that India’s attempt to enforce the tax demand violated its international legal obligations. In 2007, Vodafone acquired **Hutchison Whampoa**, a Hong Kong-based mobile operator for US$ 10.9 billion. Years later, India notified Vodafone of an order to pay more than US$ 2.14 billion in unpaid tax derived from the acquisition. In 2012, the Supreme Court of India issued a ruling in favor of Vodafone, exempting the company from tax liability. This decision prompted the Indian government to pass a new law that allowed retroactive taxation of cross-border transactions. Based on this new law, India ordered Vodafone to pay taxes on the acquisition of Hutchison Whampoa, which allegedly amounted to over US$ 3.32 billion. The Indian government threatened to seize Vodafone’s indirect holdings in India in case these obligations were not fulfilled. Vodafone filed a treaty claim holding that said tax obligation imposed by Indian government under the new law passed violated the Netherlands-India bilateral investment treaty (**BIT**). The arbitration tribunal supported Vodafone’s claim and ruled that India’s imposition violated the fair and equitable treatment standard of the BIT. **Amazon dispute with Future Group ends up in SIAC arbitration** **Amazon** has filed a SIAC claim against the Indian conglomerate **Future Group**, arguing that Future Group breached the share purchase agreement under which Amazon acquired a 49% stake in **Future Coupons**, which acts as a promoter for another group company, **Future Retail**, which in turn owns 1,500 stores all over India. The claim comes after the Indian conglomerate **Reliance Industries** had agreed to acquire a 30% stake in Future Group´s retail, wholesale, logistics and warehousing assets for US$ 3.4 billion. Amazon affirms that it was granted a right of first refusal on shares in Future Retail, so it should have been notified before any deal involving a stake sale of the company was closed. Future Group allegedly argues that it has sold its assets, not a stake in Future Retail, so that the contract with Amazon has not been violated. ### **THAILAND** **Chevron reinstates arbitration against Thailand after failed negotiation** **Chevron** has decided to resume a US$ 2 million arbitration against **Thailand**, a year after the parties suspended the procedures in order to allow time for negotiations with Thailand´s Energy Ministry. The dispute derives from a 2016 retroactive Thai Law requiring gas field operators to pay the costs of decommissioning assets they have installed, including those they would transmit to the next operator. Chevron argued that under the terms of concession agreements signed in 1971, it is only liable for decommissioning infrastructure that is no longer deemed usable, being the transferred assets responsibility of the new operator. 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