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Timeline of RPC weathering through the storm before “turn around”.
RPCG Public Company Limited or RPC has their main revenue from operating the energy business. They put forward the plan to “turn around” by joining with their partner to expand the gas station under the brand “Esso”, aiming for 100 branches within five years. They are also ready to expand into non-oil businesses with over 2 billion to ‘energy-real estate’ businesses.
THAC would like to illustrate the timeline from Rayong Purifier Public Company Limited to RPCG Public Company Limited or RPC. They were struggling through business disputes and the determination to expand their business after joining hands with “Esso” to turn around and grow their businesses. In this regard, THAC has summarized their history as follows;
1995, the establishment of “Rayong Purifier” to operate oil refinery businesses and Petroleum station “Pure”.
8 August 1995, Rayong Purifier Public Company Limited signed the Condensate Residue Sale and Purchase Agreement with PTT Public Company Limited (“PTT”), which is produced by PTT Aromatics and Refining Public Company Limited. The Agreement is reciprocal and on an evergreen basis.
30 September 2009, PTT Public Company Limited (“PTT”) submitted a notice to RPC to terminate the Condensate Residue Sale and Purchase Agreement. PTT wished to terminate the Agreement after the first 15-year term in 2012. Such notice is a 3-year prior notice. RPC had invited PTT to discuss in order to find a fair solution for both parties. However, no solution could be sought because both parties contrarily interpreted the Agreement.
3 December 2009, to maintain the shareholders’ rights to be warranted and protected under the laws, RPC entered into the legal proceedings to seek for the final decision by submitting the complaint to the arbitrators. This will allow a neutral organization to cooperate with the parties in finding a solution that is in compliance with the dispute resolution requirement stipulated in the Agreement. During the course of the arbitration proceedings, RPC and its subsidiaries had continuing to operate their businesses as usual without any effect.
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1 February 2012, PTT has stopped delivering the raw material to RPC. This is in breach of clause 15.5 of the Agreement, which clearly stipulates that while the dispute is under the arbitration proceeding, the parties must continue to perform their obligations under the Agreement until there is an award from the arbitrators.
7 February 2012, RPC had to shut down the oil plants indefinitely due to the lack of raw materials.
18 May 2012, PTT submitted the Notice of Arbitration to the Arbitration Institute to demand RPC for compensation of the final payment for raw material of condensate residue (CR).
12 June 2012, PTT submitted a Notice of Arbitration to the Arbitration Institute demanding that RPC pay the principal together with the with interest in accordance with Clause 15 of the Agreement. RPC refused to pay the aforementioned money because PTT breached the Agreement regarding the raw materials, which caused significant damages to RPC. This includes the indefinite cessation of its operation and the laid-off of almost all of its employees. As such, RPC has exercised its rights to retain the payment as damages until the arbitral tribunal renders the award.
14 June 2012, RPC received from the Civil Court an injunction order in pursuant to the fact that PTT had requested the Court injunction during the arbitration proceeding. The Court then issued an injunction prohibiting the Company from paying dividend of 400 million baht to the shareholders until the Court orders otherwise.
22 June 2012, RPC filed a request to the Civil Court seeking withdrawal of the injunction order.
30 August 2012, the Court withdrew the injunction order dated 14 June 2012. RPC was permitted to proceed with the dividend payment to its shareholders.
7 January 2014, changing the name from Rayong Purifier Public Company Limited to “RPCG Public Company Limited.”
4 April 2016, the Company received the arbitral award dated 25 March 2016 by a majority vote to order PTT to pay damages for the wrongful termination of the Agreement with RPC in the amount of 390 million baht per annum together with 7.5 percent interest starting from 1 February 2012 until the date on which the arbitral tribunal rendered the arbitration award (25 March 2016).
9 November 2016, RPC submitted a Notice of Arbitration to the Arbitration Institute demanding that PTT compensate for the breach of Condensate Residue Sale and Purchase Agreement by delivering a higher sulfur content than specified in the Agreement.
8 May 2017, RPC received the arbitral award dated 27 April 2017 in reference to a claim submitted by PTT, which demand RPC to compensate the final payment for raw material of condensate residue (CR). The arbitral tribunal ruled that RPC pay amounting to 1,500 million baht with interest at the rate of 9.375 per annum, calculated from the next date of dispute submission (which was submitted on 18 May 2012). RPC, who disagreed with the award, had proceeded to file a petition to annul the arbitral award.
19 September 2019, the Civil Court ruled in reference to petition submitted by PTT to the Court on 30 June 2016, requesting to annul the arbitral award that ordered PTT to pay RPC damages for wrongful termination of the Agreement. The ruling ordered PTT to pay damages to RPC in accordance with the arbitral award. Nevertheless, PTT still has the right to file an appeal of the judgment with the Supreme Court.
3 January 2020, RPC received the arbitral award dated 26 December 2019, with a unanimous decision that PTT pay damages for breach of contract to RPC amounting to 26.70 million baht with interest.
After the storm comes the calm. Though RPC has previously faced many crises, the Company’s turnover has “turn around” since the fourth quarter in 2020, which is quite good news. For what would happen next, please follows at www.thac.or.th.
