The military-linked giant Myanma Economic Holdings Limited (MEHL) announced on November 6 that it is launching arbitration against Myanmar Brewery Limited (MBL), its Singapore-based joint venture partner.
In a heated media release, MEHL slammed “erroneous” media reports that its arbitration against Fraser & Neave Limited (F&N) was a test case for Myanmar’s investment laws.
Seeking to limit the significance of what could be the first large-scale arbitration case to hit Myanmar’s courts since its ratification of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in July this year, MEHL deputy managing director U Myint Aung described the dispute as a purely contractual matter.
“We believe that allowing parties to exercise their contractual rights, including the right to arbitrate a dispute, will strengthen and not weaken foreign investors’ confidence in Myanmar,” U Myint Aung was quoted by his lawyers, Catherin Ong Associates, in the release.
“We know it will serve the interest of some parties to politicise the dispute but doing so does no justice to the case of anyone interested in investing in Myanmar.”
Myanmar’s new Foreign Investment Law was promulgated in November 2012 in a bid to accelerate foreign investment to Myanmar in line with its new reforms. However, these reforms lack clear dispute resolution mechanisms.
While Myanmar formally acceded to the New York Convention in July, no legislation has yet passed through parliament to implement the provisions of the convention into national law.
At the core of the business dispute is MEHL’s objection to changes to F&N’s shareholding structure. MEHL claims F&N has defaulted on an unarticulated “term in the agreement”.
Source: Myanmar Times