## [International Arbitration Newsletter - September 2021 | Regional Overview: Asia Pacific](/en_GB/new/international-arbitration-newsletter-september-2021-regional-overview-asia-pacific) # International Arbitration Newsletter - September 2021 | Regional Overview: Asia Pacific 09 / 30 / 2021 - - [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.garrigues.com/en_GB/new/international-arbitration-newsletter-september-2021-regional-overview-asia-pacific) - []() - []() Previous Next **The most relevant Asia Pacific updates from the global International Arbitration and ADR practice group at Garrigues.** ### **Cambodia** **Cambodia hit with first treatyclaim** **Qiong Ye** and **Jianping Yang**, two Chinese telecoms investors, have initiated ICSID arbitration against Cambodia over the disputes related to a 2009 ASEAN-China Investment Agreement. Based on the information available to the public, the dispute originated over Cambodia’s action to revoke or suspend the licenses of 17 telecom providers alleging that these operators had failed to comply with their obligations under the licenses. Among other measures adopted by the Cambodian authorities, the company where Mr. Qiong Ye had his investment (**Emaxx**) saw its operating licenses revoked, whilst Mr. **Jianping Yang**’s company (**Kingtel Communications**) was sanctioned. ### **CHINA** **Revised draft Chinese Arbitration Law to liberalize arbitration in China** The recently published draft to the Arbitration Law of the People’s Republic of China was published on July 30, 2021 and contains the greatest changes to the Chinese arbitration law since it was first published in 1994. In fact, this modernization could make China a more attractive arbitration seat. The Draft Law, among other things, expands the scope of arbitrable matters in Article 2, clarifies the application of the validity of the arbitration agreement of the main contract to related contracts in Articles 24 and 25, eliminates the “chosen arbitration committee” as a requisite for the arbitration agreement’s validity, reforms the rules of jurisdiction in Articles 21 and 35, introduces the concept of the seat of arbitration in Article 27, overhauls the jurisdictional challenge process in Article 28, changes the rules for the appointment of arbitrators in Articles 50 and 51 and adds a section on interim measures in Chapter IV. Furthermore, the Draft Law also establishes more flexible rules of evidence in Article 61 and clarifies the regulation on interlocutory and partial awards in Article 74. Moreover, the Draft Law adds an appeal system, limits the grounds for non-enforcement of arbitral awards, shortens the time limit for setting aside arbitral awards, unifies the criteria for setting aside domestic and foreign awards, improves the re-arbitration system, and adds a new system of interim arbitration. **US Court rejects Chinese companies’ set aside appeal** Recently an appeal launched by **Beijing Shougang Mining Investment Company** and its two affiliates to set aside an award issued by the Permanent Court of Arbitration (**PCA**) relating to a dispute with Mongolia was rejected by the US Court of Appeals for the Second Circuit. The award which the Chinese Entities sought to set aside found that the PCA tribunal lacked jurisdiction on the arbitrability issue in relation to the dispute between the Chinese Entities and Mongolia arising from a project regarding an iron ore deposit in the Tumurtei region of northern Mongolia. In 2010, the Chinese Entities resorted to arbitration claiming Mongolia had expropriated their investment, while the tribunal held that whether the facts constituted an expropriation was not covered by the applicable bilateral investment treaty and thus rejected its jurisdiction over both the claims and counterclaims. After the award was issued to the parties, the Chinese Entities decided to seek to set aside the award. The application was initially dismissed by the US District Court for the Southern District of New York and finally upheld by the Appeal Court. Both US courts found that the arbitrators acted within their powers. ### **South Korea** **ICC tribunal declines to enforce Put-option** A South Korean national **Chang Jae Shin**, CEO of **Kyobo Life Insurance**, which is the largest insurance company in South Korea, has succeeded in avoiding to buy back the shares of four minority shareholders in Kyobo at the price of USD 1.8 billion determined by the appraisers, in spite of the fact that the the Seoul-seated ICC tribunal finding that he had violated his obligations to the four minority shareholders. In 2012 four investors named **Guardian Holdings, Apfin Investment, KLIC Holdings** and **Hoenir** entered into a shareholders’ agreement with Kyobo that contained a clause that provided that should the four investors buy equity in Kyobo, Kyobo would complete an IPO by 2015, otherwise Shin would have to buy back the shares bought by the four shareholders (the “**Put-option Clause”**). In 2018 the four shareholders sought to trigger the Put-option Clause following the failure of the IPO at that time. Shin responded by claiming the Put-option Clause was invalid under the Korean Financial Supervisory Service’s regulations. The four investors then launched an ICC arbitration in 2019. Despite the tribunal holding that the Put-option Clause was valid in the shareholders’ agreement, it declined to enforce the clause. The tribunal held that pursuant to the shareholders’ agreement, the appraisers were to be nominated by each party respectively, but Shin failed to do so. Accordingly, as a result of this breach by Shin the tribunal applied Korean law, under which it is not possible to force Shin to buy back the shares at the price proposed by the appraisers nominated by other parties. ### **Singapore** **Singapore court grants super priority status for third-party funding** In a recent decision the Singapore High Court, considering Antanium Resources´ bid to perform a debt restructuring scheme based on the Singapore’s Insolvency, Restructuring and Dissolution Act 2018, issued an order to recognize the top priority of recoveries provided by a third-party Australian disputes funder called **Omni Bridgeway** to Antaniumto pursue HKIAC arbitration against one of the latter’s’ creditors named **Industrial Bank of Korea**. Of the 12 Antanium’s creditors participating in the hearing, only one (Industrial Bank of Korea) objectedto the super-priority order application. The court fully supported Antanium’s application, not only ruling the security on any debt arising from the arbitration funding agreement entered into between Omni Bridgeway and Antanium by all recoveries acquired by Antanium in the HKIAC arbitration, but also granting the overriding status of Omni Bridgeway over recoveries. 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