Glencore International Plc’s Singapore unit has paid a $20.2 million arbitration award to Tipco Asphalt Pcl’s Thai Bitumen Co., which will withdraw a lawsuit seeking to liquidate the commodities trader in the city.
“Glencore Singapore has only just paid the principal sum of the award,” Thai Bitumen’s lawyer Lim Chee Wee said in an e-mailed statement today. “The only outstanding issue now is the recovery of interest and costs.”
Thai Bitumen filed a winding-up petition on Nov. 23 against the Singapore unit of Glencore, the largest publicly traded commodities company, claiming it should be declared insolvent for being unable to pay its debts. A closed hearing was scheduled for Dec. 9.
Charles Watenphul, a spokesman for Baar, Switzerland-based Glencore, didn’t immediately respond to an e-mail and calls to his office outside of regular business hours went unanswered.
Glencore was ordered to pay $20.2 million and interest to Thai Bitumen by arbitrator Kenneth Rokison on Sept. 21, according to the lawsuit. Glencore failed to deliver 600,000 barrels of Venezuelan crude oil to Thai Bitumen, breaching an October 2008 sale contract, Rokison ruled in the London arbitration proceedings.
Thai Bitumen, a unit of Thailand’s biggest asphalt producer Tipco Asphalt, and Glencore couldn’t agree on the interest amount to be paid on the arbitration award, according to court papers. Glencore’s lawyers claimed Thai Bitumen had over-calculated the interest by $42,785, according to court filings.
Glencore declared force majeure on the delivery to Thai Bitumen, a legal clause that allows delays because of an incident outside a supplier’s control, after a decision by Venezuelan state oil company Petroleos de Venezuela SA to cut production in 2008, according to the filing.
The Organization of Petroleum Exporting Countries, or OPEC, announced that they were cutting production in December 2008 after oil prices fell to their lowest in more than four years.
The case is Thai Bitumen Co. v Glencore Singapore Ltd. CWU152/2011 in the Singapore High Court.