Court to decide on arbitration ruling on Hans-Sinopec dispute

A legal battle between privately-owned fuel storage facilities operator Hans Energy and state-backed giant China Petroleum & Chemical (Sinopec) is set to move to the court room in May.

The case, a rare David-versus-Goliath confrontation between a small private firm and a state- energy giant, will be closely watched by other mainland enterprises, especially those in the energy industry dominated by state firms.

This is because since late last year state leaders have ordered state-owned giants to invite private firms to participate or invest in their projects or assets to make state firms more profit-oriented.

The Guangzhou Intermediate People's Court has accepted Sinopec's application to revoke a ruling made early in March by the Guangzhou Arbitration Commission, which found Sinopec to have breached a facilities rental agreement and ordered it to pay Hans a default payment of 607 million yuan (HK$762 million). Sinopec has not paid.

The Guangzhou Intermediate People's Court has notified Hans that it has accepted Sinopec's application for revoking the arbitration ruling, Hong Kong-listed Hans said in a statement to the stock exchange yesterday.

Hans also received a summons issued by the court for a hearing of Sinopec's application, scheduled for May 20.