Shearman & Sterling has secured victory on behalf of its client, PetroVietnam, in a major tax dispute under a production sharing contract for a Vietnamese offshore oil concession. In an award issued on 22 May 2015, an Arbitral Tribunal comprised of leading international arbitrators Gary Born (Chairman), David A R Williams QC and Yves Derains rejected all claims against PetroVietnam and ordered the Claimants to reimburse PetroVietnam’s costs of the arbitration in full.
The arbitration concerned claims under Vietnamese petroleum, tax and investment law for more than $100 million in respect of taxes paid by the contractors to the Vietnamese Government for profit on oil production. Among other things, the dispute is notable for its precedential value for other contractors in Vietnam’s upstream oil and gas industry. The proceedings were conducted in Singapore on a fast-track basis with the award issued less than 18 months after the initial request for arbitration.
Partner Yas Banifatemi comments, “We are extremely pleased to have secured a complete dismissal of the claims brought against our client. This award confirms that PetroVietnam and its commercial partners in Vietnam can expect their contractual arrangements to be applied and enforced as negotiated and agreed.”
Emmanuel Gaillard, head of Shearman & Sterling’s international arbitration practice, adds, “This case is an example of arbitration at its best: an efficient process, led by a Tribunal comprised of international arbitrators of the highest caliber having the requisite expertise, with a legally sound award which has fully resolved the Parties’ dispute and now allows them to continue their fruitful commercial relationship.”
Shearman & Sterling’s team included partners Emmanuel Gaillard (Head of International Arbitration) and Yas Banifatemi (Head of Public International Law) together with associates James Herbert and Anne-Catherine Salin (Paris-International Arbitration). Shearman & Sterling was assisted by co-counsel from YKVN LLP led by partner K. Minh Dang and counsel Do Khoi Nguyen.
The successful outcome of this dispute further consolidates Shearman & Sterling’s exceptional track record in the field of international arbitration and confirms the reputation of its global international arbitration practice as the market leader for sensitive and high-stakes international disputes. Shearman & Sterling’s international arbitration team recently secured the two largest awards ever issued in the history of international arbitration: the landmark $50 billion award in favor of the Yukos majority shareholders against the Russian Federation and the $2.47 billion award in favor of the Dow Chemical Company relating to a failed joint-venture dispute in Kuwait. Shearman & Sterling opened its first office in Asia in 1978, and has handled an increasing number of international arbitrations related to Asia over the past 15 years.