Vietnamese manufacturer Rang Dong Plastics has lost a lawsuit to its Japanese shareholder, Sojitz Planet, costing the company more than $6.4 million, with interest and court fees to be paid in addition to that amount.
The strategic partnership between Rang Dong Plastics and Sojitz Planet dates back to 2017, when the two sides signed a share purchase contract. Sojitz bought five million ordinary shares of Rang Dong Long An, worth over VND174 billion ($7.1 million). Rang Dong Long An was an 80:20 venture between Rang Dong Plastics and Sojitz.
Sojitz made full payments for the tranche but following the share transfer, Rang Dong was accused of violating a number of obligations post-transfer. The Japanese corporation then exercised its rights to terminate the contract and requested Rang Dong to immediately refund 90 per cent of the payment, equivalent to nearly VND157 billion ($6.4 million).
However, Rang Dong refused to make the refund payment, so Sojitz initiated a lawsuit at the Singapore International Arbitration Centre (SIAC) and on July 6, last year, an arbitration council issued a ruling that Rang Dong had to return the requested VND157 billion ($6.4 million).
The Vietnamese manufacturer was also requested to pay Sojitz 10 per cent annual interest on the sum, from April 1, 2020 until payment was made. At the same time, Rang Dong was required to pay fees and charges exceeding $270,000 to the arbitration council and SIAC.
Rang Dong lodged a complaint against the ruling, saying that there are no grounds to prove the violations or damages.
Ho Chi Minh City People's Court declared in January of this year that it did not recognise the SIAC's ruling. However, Sojitz later filed an appeal against the judgment of Ho Chi Minh City People's Court, requiring the court to examine the evidence and the outcomes of the trial.
Following the review, Ho Chi Minh City People’s Court accepted Sojitz's appeal and has allowed the enforcement of the SIAC's ruling.
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