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SINOPEC KANTONS HOLDINGS LIMITED
（ 中 石 化 冠 德 控 股 有 限 公 司 ）*
(incorporated in Bermuda with limited liability)
(Stock Code: 934)
INSIDE INFORMATION
UPDATE ON ARBITRATION INVOLVING A SUBSIDIARY
This announcement is made by Sinopec Kantons Holdings Limited (the "Company") pursuant to Rule 13.09(2)(a) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
References are made to the announcements of the Company dated 15 November 2016 and 21 March 2017 respectively, whereby it was announced that on 11 November 2016, Sinomart KTS Development Limited ("Sinomart"), a direct wholly-owned subsidiary of the Company and PT. West Point Terminal ("PT. West Point"), Sinomart's 95%-owned subsidiary incorporated in Indonesia in which PT. MAS Capital Trust ("PT. MCT") holds a 5% interest therein as the minority shareholder, received two notices from the International Court of Arbitration of the International Chamber of Commerce (the "ICC Court") in respect of the submission of requests for arbitration by PT. MCT and PT. Batam Sentralindo ("PT. BS") respectively on disputes (the "Disputes") regarding the shareholders' agreement dated 9 October 2012 entered into between Sinomart, PT. MCT and PT. West Point (the "SHA") and the land lease agreement dated 9 October 2012 entered into between Sinomart, PT. MCT, PT. West Point and PT. BS (the "LLA"). Details of the said SHA and LLA are disclosed in the announcement of the Company dated 9 October 2012.
The board of directors of the Company (the "Board") wishes to inform the shareholders (the "Shareholders") and potential investors of the Company that on 4 December 2019, Sinomart and PT. West Point received two arbitral awards (the "Awards") in respect of the Disputes from the ICC Court. Details of the Awards are set out as follows:
Awards in respect of the Disputes concerning the LLA
In the arbitration concerning the LLA (the "LLA Arbitration"), the arbitral tribunal (the "Tribunal") decided in favour of Sinomart and PT. West Point, dismissing all of PT. BS' claims and finding in favour of Sinomart and PT. West Point on the most fundamental issue in the arbitration. The Tribunal held that
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PT. West Point has the right to terminate the LLA due to PT. BS's material breaches of the agreement, which included, inter alia, frustrating all key decisions in relation to the development of the crude oil and refined products storage and oil blending complex and supporting quay and port facilities of PT. West Point in Batam, Indonesia; obstructing the procurement and maintenance of visas for PT. West Point's non-Indonesian personnel; commencing unfounded and malicious criminal proceedings against PT. West Point's personnel in Indonesia; blocking the reconstitution of PT. West Point's management organs; and depriving PT. West Point of its entitlement to security over the 50-year lease by way of mortgages. The Tribunal further ruled that, upon termination of the LLA, PT. West Point is entitled to a refund of the unused portion of the lease fee that it had paid to PT. BS under the LLA, which amounts to S$ 79,480,567.10 assuming a termination date of 31 December 2019.
Finally, the Tribunal ordered PT. BS to bear all of the arbitration costs fixed by the ICC Court, 80% of Sinomart and PT. West Point's legal costs in connection with the arbitration, as well as their own legal costs. Sinomart is therefore entitled to recover US$532,000.00, US$4,912,250.68, S$10,819.24, HK$1,184,472.92 and €114,719.96 in the LLA Arbitration. The Tribunal further ordered PT. BS to pay simple interest on these amounts at an annual rate of 5.33% from the date of notification of the award and until full and final payment.
Awards in respect of the Disputes concerning the SHA
Sinomart and PT. West Point also prevailed in the arbitration concerning the SHA (the "SHA Arbitration"). The Tribunal dismissed all of PT. MCT's claims and found in favour of Sinomart and PT. West Point on the most fundamental issue in the arbitration. The Tribunal held that Sinomart and PT. West Point have the right to terminate the SHA due to PT. MCT's repudiatory breaches of the agreement, which included, inter alia, frustrating all key decisions in relation to the development of the crude oil and refined products storage and oil blending complex and supporting quay and port facilities of PT. West Point in Batam, Indonesia; obstructing the procurement and maintenance of visas for PT. West Point's non-Indonesian personnel; commencing unfounded and malicious criminal proceedings against PT. West Point's personnel in Indonesia; and blocking the reconstitution of PT. West Point's management organs. The Tribunal also ordered PT. MCT to refrain from bringing any proceedings in national courts in breach of the arbitration agreement. Finally, the Tribunal ordered PT. MCT to bear all of the arbitration costs fixed by the ICC Court, 80% of Sinomart and PT. West Point's legal costs in connection with the arbitration, as well as their own legal costs. Sinomart is therefore entitled to recover US$560,400.00, US$4,786,109.18, S$ 10,819.24, HK$1,184,472.92 and €114,719.96 in the SHA Arbitration. The Tribunal further ordered PT. MCT to pay simple interest on these amounts at an annual rate of 5.33% from the date of notification of the award and until full and final payment.
The Company will follow up closely with regard to the recognition and enforcement of the Awards and any related matters. The Company will take all appropriate steps to protect the rights and interests of the Company and the Shareholders.
The Company will make further announcement(s) to update the Shareholders, the potential investors of the Company and the public as and when appropriate as required under the Listing Rules.
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Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.
By order of the Board
Sinopec Kantons Holdings Limited
Chen Yaohuan
Chairman
Hong Kong, 6 December 2019
As at the date of this announcement, the Board comprises the following:
Executive Directors:
Mr. Chen Yaohuan (Chairman)
Mr. Xiang Xiwen (Deputy Chairman)
Mr. Dai Liqi
Mr. Li Jianxin
Mr. Wang Guotao
Mr. Ye Zhijun (Managing Director)
Independent non-executive Directors:
Ms. Tam Wai Chu, Maria
Mr. Fong Chung, Mark
Dr. Wong Yau Kar, David
Ms. Wong Pui Sze, Priscilla
- For identification purposes only
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