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6 Dec 2021

Junya Henmi, Nikkei Asia

Myanmar: Japanese brewer Kirin asks Singapore International Arbitration Centre to resolve dispute over ending venture with junta-linked firm

"Kirin seeks arbitration to end venture with Myanmar military" 6 December 2021

Japanese brewer Kirin Holdings asked on Monday the Singapore International Arbitration Centre to resolve a dispute over ending its business partnership with the Myanmar military, the company said.

Kirin announced on Monday that it had filed for arbitration with the SIAC, hoping involvement by a third-party body would help end the impasse. Kirin is also counting that having its argument heard on the international stage will help its case and add pressure on the military-backed venture partner.

[...]At issue is the fate of Myanmar Brewery, operated by Kirin and Myanma Economic Holdings (MEHL). The Japanese brewer decided to unwind the partnership after Myanmar's military took control of the country, but it still hopes to continue operating the business after MEHL gives up its stake.

But it is unclear whether MEHL will abide by whatever ruling the SIAC will issue. Kirin owns 51% of Myanmar Brewery, with MEHL holding the rest.

In November, MEHL unilaterally filed a request with the Yangon West District Court to dissolve the joint venture. [...]

Kirin had obtained a provisional injunction from Singapore's high court on 2 December, ordering MEHL to suspend proceedings to dissolve the partnership, the company said in the Monday announcement.

Along with the arbitration at the SIAC, Kirin will also ask the Myanmar court to reject MEHL's liquidation request.

"We will request dismissal of the petition because of doubts about the fairness and appropriateness of the liquidation process," Kirin said in a statement last month.

Even if the SIAC rules in favor of Kirin, a Myanmar court ruling allowing liquidation could prompt MEHL to move ahead, said Yoshihiro Takatori, managing director at the Japan Association of Arbitrators.

Before deciding on the dissolution of the partnership with the military in February, Kirin stopped paying dividends to MEHL in November 2020 for the military's alleged involvement in the persecution of the country's Rohingya Muslim minority. [...]