Shell files tax case for international arbitration

MANILA, Philippines – The Philippine unit of Royal Dutch Shell has filed a new case against the  government in another international arbitration court over its P53.14-billion tax dispute from the Malampaya deep water gas-to-power project.

Shell Philippines Exploration B.V. (SPEX) has lodged a request for the institution of arbitration proceedings against the Philippine government at the International Center for the Settlement of Investment Dispute (ICSID).

Data from ICSID’s website showed the application was registered on  July 20, 2016 and the proceeding is still pending since the tribunal has yet to be constituted.

Claimants to the case are US-based King & Spalding and Makati-based Romulo Mabanta Buenaventura Sayoc & De los Angeles while the Office of the Solicitor General of the Philippines was named as the respondent.

In a statement yesterday, SPEX confirmed it has filed a request for arbitration with ICSID.

“The case has been filed pursuant to the bilateral investment treaty between the Philippines and the Netherlands,” it said.

The Commission on Audit (COA), in an April 6, 2015 decision, upheld its 2009 findings that P53.14-billion was uncollected from the consortium operating the Malampaya project.

SPEX and other members of the consortium – the Philippine National Oil Co. Exploration Corp., and Chevron Malampaya LLC – appealed COA’s 2009 findings but COA rejected the petition for review.

The DOE was ordered by COA  to collect the alleged under-collection of royalties, or the government’s share, from the Malampaya project from 2002 to 2009.

SPEX then decided to sue the Philippine government by filing an arbitration case with the Singapore International Arbitration Center in Singapore late last year.