Issue #6: It’s All About the Money, Money, Money

Written By Overheard in Asia

City Building Ain't That Easy

So you wanna build a city?

Yeah, it ain't that easy. 

How It Started

In 2002, the subsidiary of a Korean steelmaking group, Posco, formed a JV with a New York developer, Gale Corporation, to develop Songdo International Business Complex ("IBC").

What's IBC?

A USD 40 billion "smart city" development located near Seoul, which promotes low-carbon sustainable living.

We're talking tens of 1000s of residential housing units, 4 universities, hospitals, a convention centre modelled after Sydney Opera House, a 100-acre replica of New York’s Central Park, Venetian-style canals & Korea’s second tallest tower.

🤑🤑🤑🤑🤑🤑

The Issue

Gale got kicked out of the JV. 😟 

In 2009, Gale launched an ICC claim, claiming that the Korean subsidiary was:

  • grossly overcharging for construction work;

  • using improper accounting practices; and

  • wrongfully selling its interest in their JV to 2 Hong Kong companies without compensation.


Tribunal Held
The subsidiary’s subrogation & sale of Gale’s stake in their JV to a third party was not in breach of the JV agreement. 

To add 🧂 to wounds, Gale was also ordered to pay the arbitration costs in full. 🙊

I Want It ALL!!

Manono - a town located Southeast of the Democratic Republic of the Congo - just might possess the world's largest untapped lithium deposit.

And where there's 💵💵, there's... dispute.

Buckle in, coz we've got some maths to do.

Fight 1: AVZ v Zijin Mining

Dathcom is a 2016 JV that owns 100% of the Manono Lithium mine.

Its initial shareholders were:

  • Cominiere: 25%

  • AVZ: 60%

  • Dathomir Mining Resources: 15%

Zijin claims that it bought a 15% stake in Dathcom through Cominiere. 

AVZ considers the 15% transfer to be "without merit" because it ignored its right to buy the stake under Dathcom's articles of association & Shareholders Agreement.

The ICC is expected to hear this case next year.

Fight 2: AVZ v Dathomir 

AVZ claims to have purchased Dathomir's 15% share. 

Dathomir disagrees, claiming that AVZ had failed to make payment within the required time period.

The Commercial Court of Lubumbashi ordered the suspension of the payment of the balance purchase price, while waiting for the arbitration judge to rule on the merits of the case.

However, AVZ still insists that it owns said 15% and that the court's decision was "immaterial".

So... who owns what again? Please help us do the math. 🤔
 

I’m Fighting Cancer!

"I'm fighting cancer!" should be a noble quest but y'know, this is the real world.

And this is a disputes newsletter. 😉

So predictably... 👇🏻

Background

In 2018, Tracon Pharmaceuticals (a US biotech company) and I-Mab (its Chinese partner) signed 2 collaboration agreements to develop cancer-fighting antibodies owned by I-Mab.
 

📝 Agreement 1


Under Agreement 1, I-Mab wants a declaration that it lawfully ended the partnership after the Phase 1 trial ended.

It issued a termination notice last year, incurring a USD 9 million termination fee payable to Tracon. 

However, Tracon claims that I-Mab couldn't terminate as the Phase 1 trial was not yet complete.
 

📝 Agreement 2


Under Agreement 2, Tracon is claiming USD 200+ million in damages following a failed collaboration to develop up to 5 "bispecific" antibodies - molecules that engage 2 disease targets.

I-Mab, on the other hand, wants a declaration that the partnership has been terminated & that no damages should be given to Tracon. 
 

🚨 And Then...


I-Mab sued Tracon in the Delaware Court of Chancery last year, seeking:

  • a declaration that it'd validly terminated the contracts; and

  • damages - over Tracon's alleged misuse of confidential information & putting it at a "significant disadvantage in the competitive race to bring cancer-treating drugs to market".


The Court stayed the lawsuit and has left it to the ICC tribunal to determine:

  • issues of arbitrability;

  • whether parties completed the Phase 1 trial;

  • future exclusivity arrangements; and

  • whether the bispecific collaboration had been terminated.


TL;DR
Imagine wanting to get out of a relationship but your clingy partner just won't let you?

Yeah... we feel you, I-Mab. 

Although there are probably 2 sides to the story, as always! 😉

Spotlight - Eugene Thong 

⚒️ What do you do?

I work at The Arbitration Chambers as tribunal secretary.

Currently I’m working on, amongst other things, two bilingual commercial arbitration cases as well as a handful of investment arbitration cases, including a non-ICSID one.

🏆 What is your proudest professional achievement?

I wouldn’t really call it my proudest achievement (not really sure what that would be), but I still think it remarkable that I once managed to pull through (and pass) a series of law exams starting three days after a fire broke out at home which had left me quite literally without a proper roof over my head. 😅

Throughout the entire exam season, I was also reviewing study materials with sounds of renovation works in the background. 😫
 

⌛ There are now 25 hours in a day! How do you spend your extra hour?

Maybe a swim 🏊‍♂️, or some calligraphy.
 

🚀 If you weren't a lawyer, what would you do?

I honestly don’t know. 🤷🏻‍♂️

I wouldn’t say that being a lawyer is how I define myself, but in adolescence I once sat down and drew up a list of things I would like to have in a job, and realised that the legal profession was a pretty good fit. 🤩
 

😋 Your favourite food haunt (bonus points if it's off the beaten track!)

I don’t really have a favourite food haunt so I’ll recommend a number of good lunch / dinner places in the Tanjong Pagar area in Singapore, where I work, instead:

Food Feature

This iced coconut coffee (cafe maak pao) is bliss in a cup, and a must-have when in Vientienne, Laos!

Look for Kung's Cafe Lao. 

The cafe is a quaint little diner with hanging gourds and located in Phiawat Village, right across from the Ministry of Health.

If you get lost, just ask one of the shopkeepers. They'll definitely help you out! 


Details: Google Maps, Tripadvisor

Are you a student or young lawyer?

Want to get involved in helping to run Overheard? Meet senior practitioners? Do legal research with real world impact?

We're always looking for bright, young talent like yourself so if you're interested, give us a holler at editor@overheard.asia! 

Special thanks to Overheard in Asia's sponsor:

David Grief was described as "the Law's Middleman" (Business Times, 2021). You can reach out to him at dg@davidgrief.com if you need help identifying the right lawyer, arbitrator or expert for your matters, or even if you just want to grab a drink 🍵🍺 with someone who has managed and mentored lawyers for almost 5️⃣0️⃣ years! 

Overheard in Asia
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