TPC pushes for arbitration to settle Lien resort dispute

Tourist Company (TPC) in November 1995 to build the resort on the banks of the capital’s famous West Lake. Construction was halted in September 1998 when the joint venture ran out of money.
Hyundai handed over the 80-per-cent complete resort to TPC in October, presenting them with a bill for $31.4 million.
TPC has so far paid Hyundai $26.8 million, meaning $4.6 million is still owed.
Hyundai brought the case to court mid last year, asking TPC to pay the debt plus $1.8 million in retention payments and $1.28 million for left over materials.
The Hanoi People’s Court issued a verdict in early March ordering TPC to settle the $4.6 million debt immediately with Hyundai, saying the retention money and other costs could be negotiated at a later time.
TPC deputy general director Nguyen Viet Tao refuted the verdict, saying that the case was not under the jurisdiction of Hanoi People’s Court.
Tao referred to Article 34 of the contract which states that any dispute arising either during progress or after the completion or abandonment of works shall be referred to arbitration and finally settled under the provisions of the Arbitration Act of the Singapore Statute.
“It means the case should be settled by arbitration in Singapore rather than by any court in Vietnam,” Tao said.
The Hanoi People’s Court said the dispute could not be brought to arbitration in Singapore as the contract had been null and void since January 2001 when TPC first recognised the $4.6 million debt to Hyundai.
But TPC’s lawyer, Hoang Thanh Sy, said Article 34 remained valid and the dispute should be settled in Singapore.
Tao said the two sides were still wrangling over the debt and retention money, and that it would be better for all parties involved if the case went to arbitration in Singapore.
“We accept that we owe Hyundai $4.6 million, but we want to reiterate that all disputes must be settled by Singaporean arbitration,” Tao said.
TPC was formed in 1993 as a joint venture between Vietnam’s Tu Liem Culture and Tourism Company,


Singapore’s Lien Holdings and Malaysia’s Pernas Securities Berhad.

Tao said the contractor was in breach of its warranty as it had not repaired defective areas. He also requested a $2.4 million fine against Hyundai for construction progress that was 140 days behind deadline.
Tao complained that due to the delays the joint venture could not mobilise sufficient capital to continue construction when the Asian economic crisis hit in late 1997.
The 395-room resort project was licensed to Vietnam’s Tu Liem Culture and Tourism Company, Singapore’s Lien Holdings and Malaysia’s Pernas Securities Berhad in 1991.
The project was 80 per cent complete before it was put on ice in 1998. It is estimated that the investors require a further $20 million to complete the project.
Tao said the growing demand for hotel accommodation in Hanoi and the recent restructuring of the joint venture’s local and foreign ownership would help raise further capital for the resumption of the resort’s construction.