Japan’s Kirin Seeks Arbitration in Singapore to End Venture With Myanmar Military

By The Irrawaddy 7 December 2021

Japanese beverage giant Kirin has filed for arbitration at the Singapore International Arbitration Centre over the termination of its joint venture with Myanmar military conglomerate Myanmar Economic Holdings Limited (MEHL).

After the Myanmar military coup in February, Kirin announced that it was ending its partnership with MEHL as the conglomerate provides a welfare fund for the military, while expressing deep concerns over the actions of the military, which it said ran counter to the company’s standards and human rights policy.

Kirin previously said in its third quarter report that it was preparing and considering all possible means to terminate its partnership with MEHL by the end of 2021.

Kirin and MEHL are joint venture partners in Myanmar Brewery Co. Kirin bought a 51-percent stake in the company from MEHL in 2015 for over US$560 million, becoming the major stakeholder.

In its statement on Monday, the Japanese company said it made repeated attempts to negotiate with MEHL to terminate the partnership but the conglomerate was “uncooperative and effectively rejecting its proposals”, adding that the military conglomerate last month filed a petition to liquidate Myanmar Brewery in a court in Yangon.

Kirin said the liquidation move was “unjustified”, breaching the joint venture agreement and in violation of the law, so its Singapore subsidiary obtained a provisional injunction order from the country’s high court last week ordering MEHL “to suspend the proceedings of its petition.”

“In line with our firm commitments to the termination of the joint venture partnership, Kirin Holding has decided to file for arbitration based on the joint venture agreement in order to ensure that the process is fair and just,” the company said.

On Monday, Justice for Myanmar welcomed Kirin Holdings’ move to file for arbitration against MEHL.

“MEHL has a 49-percent stake in Myanmar Brewery. If Myanmar Brewery’s assets are seized by MEHL, they will be used to finance further atrocities,” it said.

Kirin stopped making dividend payments to MEHL last year after it was condemned by international rights groups for its partnership with Myanmar’s military amid accusations of genocide against the Rohingya.

Following the coup this year, Kirin came under further international pressure to end its partnership with the Myanmar military.

Apart from Kirin Ichiban, Myanmar Brewery’s brands include Myanmar Beer, Andaman Gold and Black Shield Stout, giving it an 80-percent share in the country’s beer market.

However, its profits plunged by almost 50 per cent year-on-year in the third quarter of 2021 in the wake of the junta’s Feb. 1 coup, as the Myanmar people continue to boycott military-linked products as part of a campaign to sever the coup leaders’ financial lifelines.

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