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

The most relevant Asia Pacific updates from the global International Arbitration and ADR practice group at Garrigues.


Chinese state entity and Yemen settle airport dispute

A Chinese state entity’s ICSID claim against Yemen over the expropriation of its investment in an airport development project has been discontinued after the two sides reached a settlement. The discontinuance of Beijing Urban Construction’s claim, which had been brought under the China-Yemen 1998 bilateral investment treaty, was recorded on the ICSID website on 7 June 2018. The parties had agreed to suspend the proceedings in January. Beijing Urban filed the claim in 2014 in relation to a US$114 million deal it had signed with Yemen’s civil aviation and meteorology authority to build an international airport in the country’s capital, Sana’a. Work began in 2006 and was expected to be completed within two years but there were substantial delays.


Hong Kong Court allows Japan Commercial Arbitration Association award enforcement

In a recent judgment, the Hong Kong court of first instance refused to set aside an enforcement order for a US$22.1 million Japan Commercial Arbitration Association award in favour of Japanese appliance maker Paloma Company against parts maker Capxon Electronic Industrial Company.Capxon argued that the award was biased since Paloma should have been required to prove that it had caused defects in the products and that the reversal of the burden of proof was a breach of Japanese law and a serious irregularity under Hong Kong law.However, the Hong Kong Court found the arbitral tribunal had shown no actual bias.


US District court refuses to enforce an UNCITRAL award against India

On 7 June 2018 the US District Court for the District of Columbia dismissed an application filed by Chennai-based subsidiary of Scotland’s Hardy Oil & Gas to enforce an UNCITRAL award against India.The court declined to enforce the specific performance part of the award as it would affront India’s sovereignty to force it to restore Hardy’s interest in the oil block and that such an infringement would contravene the US’s public policy interest in respecting the territorial integrity of other states – including their right to control the extraction and processing of natural resources within their own territories.


Indonesia hit by US$20 million LCIA award in favour of Avanti Communications

British satellite company Avanti Communications has been awarded US$20 million in a LCIA arbitration against Ondonesia.Avanti brought the claim against Indonesia’s Ministry of Defence claiming it was owed US$17 million in lease payments after renting Artemis, an earth orbit satellite used for telecommunications, to Indonesia for US$30 million.Although Indonesia argued that the company’s actions could harm its national security, Indonesia has been ordered to pay the sum by the end of July.


Turkish investor asks US Court for ICSID award enforcement against Pakistan

In a recent petition filed before the US District Court for the District of Columbia, Turkish energy investor Karkey Karadeniz Elektrik seeks the enforcement of a US$845.89 million ICSID award – one of the largest in ICSID’s history – against Pakistan over the state’s detention of power generation vessels used to supply electricity to the port city of Karachi during a power crisis.The award held that Pakistan had violated all its obligations under the Turkey-Pakistan bilateral investment treaty by expropriating Karkey’s investments in the state and restricting its right to free transfer of its investment.


Singapore court enforces SIAC award despite incorrect seat

In a judgment dated 18 June 2018 the Singapore High Court has allowed Macao-registered Sanum Investments gaming company to enforce a US$270 million SIAC award against its former business partners in Laos despite finding that the arbitration ought to have been seated in Macao rather than Singapore.


South Korea hit by first ever investment treaty loss

A Iranian consumer electronic group has been awarded a US$68 million claim filed against South Korea under the 1998 bilateral investment treaty with Iran following an UNCITRAL arbitration, representing South Korea´s first ever published loss under a BIT.The tribunal found that through its specialised debt resolution agency, the Korea Asset Management Company or KAMCO, Korea had abused its public power and breached the treaty’s fair and equitable treatment guarantee and meant the Dayyanis' claim was successful.

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