Ipic won't follow S Korea refiner stake sale ruling

Abu Dhabi-based International Petroleum Investment Co (Ipic) said on Thursday it would not follow a recent arbitration ruling to sell its controlling stake in a South Korean refiner until local courts enforced it.

Ipic has been in a dispute with companies related to the former Hyundai Group, led by Hyundai Heavy Industries, which are seeking to buy back Ipic's 70 per cent stake in Hyundai Oilbank.

Last week, the Singapore International Chamber of Commerce (ICC) made an ruling that called on Ipic to sell its entire stake to Hyundai companies for about 2.6 trillion won ($2.25 billion).

"The arbitral award has no legal effect unless and until Hyundai shareholders obtain a final enforcement judgment from the Korean courts," Ipic said in a statement distributed in Seoul.

"Ipic believes that certain key factual and legal conclusions of the arbitral award are incorrect, and, as a result, does not believe the award is enforceable in Korea."

Hyundai Heavy said in a separate statement that it and other Hyundai shareholders would take "necessary legal steps" following Ipic's refusal to follow the ICC arbitration.

"We will acquire Ipic's 70 per cent stake and control (of Hyundai Oilbank) through a necessary legal process," Hyundai Heavy said, adding it would hold Ipic accountable for any damages from the delayed deal.

Ipic, which invests in oil-related projects for the government of Abu Dhabi, acquired 50 per cent of Hyundai Oilbank in 1999 and took another 20 per cent in 2003. Hyundai Oilbank is South Korea's smallest oil refiner with a capacity of 390,000 barrels per day.

Hyundai shareholders own a combined 30 per cent stake in Hyundai Oilbank, including 19.87 per cent held by Hyundai Heavy and 4.35 per cent owned by Hyundai Motor.