By Kim Hyun-cheol
Staff Reporter
Hyundai Heavy Industries, Korea's biggest shipbuilder, and International Petroleum Investment Co. (IPIC) are waging a battle for a better position ahead of a final ruling on their joint venture, Hyundai Oilbank.
Their latest battle began Tuesday, when IPIC, UAE's state-backed oil firm, claimed a victory in its dispute with Hyundai Heavy in a legal battle handled by the International Court of Arbitration (ICA) in Singapore. An IPIC spokeswoman told The Korea Times that although she couldn't go into details, this victory could spare IPIC from the payment of $3 billion.
The final verdict is expected in May at the International Chamber of Commerce (ICC).
In a lengthy statement, IPIC argued that it had ``succeeded'' in a legal process triggered by Hyundai Heavy last year to block it from selling all or part of a 70 percent stake held by its two subsidiaries ― Hanocal Holdings and IPIC International.
``This victory means that we are now in a position to ask Hyundai Heavy to pay for legal fees incurred in the process of pursuing this case,'' she said.
However, Hyundai Heavy said that nothing has changed since the ``clarification,'' made by ICA in Singapore.
``I don't know why IPIC is making a fuss over a ruling made last December,'' a Hyundai spokesman said. ``This doesn't change anything, particularly since IPIC doesn't have any stake in Oilbank.'' He didn't say why it didn't mention the ruling for two months until IPIC brought up the issue.
Hyundai claimed that IPIC didn't comply with its ``rights of first refusal'' by trying to sell its stake to GS Caltex and other potential bidders last year, taking the issue to the Singapore branch of the ICC. IPIC argued that Hyundai's claim was flawed, saying that it followed up on the process as stipulated in their contract, having asked Hyundai whether it was willing to exercise its right to purchase IPIC's stake.
``Our contract and ICA carry confidentiality clauses, so I may not talk about details of our dispute,'' the Hyundai spokesman said, when asked to respond to IPIC's claim in the statement that it indeed asked Hyundai to buy up to a 50-percent stake to be put up for sale by IPIC. An official from communications firm Edelman, representing IPIC, said that that was not covered by the confidentiality clause.
However, Hyundai Heavy has a 19.2-percent stake in Oilbank, the fourth largest oil refiner in Korea, while IPIC is owned by the UAE.