What the railway land dispute is about

Today Online 1 Nov 14;

1990: Then Prime Minister Lee Kuan Yew and Malaysia’s then Finance Minister Daim Zainuddin signed a Points of Agreement (POA), under which the Malayan Railway station would vacate the land at Tanjong Pagar — later referred to as Keppel — and relocate

The vacated land, together with two parcels at Kranji and Woodlands, would be vested in a joint venture company and developed as residential and commercial land. In exchange, a plot of land of equivalent value in Marina South will be offered to the company.

2010: The POA was followed by an impasse of 20 years, as Singapore and Malaysia could not agree on several of its clauses. In 2010, Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak agreed on a landmark land swap deal. The three plots of ex-railway land — Keppel, Kranji and Woodlands — and another three plots in Bukit Timah, would be exchanged for four parcels of land in Marina South and two parcels of land in Ophir-Rochor.

A new company, M+S, was formed to develop the Marina South and Ophir-Rochor parcels. Malaysia’s Khazanah Nasional held a 60 per cent stake in the company and Temasek Holdings held the remaining 40 per cent.

As the Bukit Timah parcels were not covered by the POA, Malaysia agreed development charges were payable for these plots. However, they disputed the charges for Keppel, Kranji and Woodlands. Both sides agreed to settle the matter through arbitration under the Permanent Court of Arbitration at The Hague.

SINGAPORE ARGUED:

• Both parties agreed to creating a joint venture to develop the three POA parcels, subject to Singapore’s development laws. This includes the need to obtain planning permission. As a precondition, the laws here require the company to pay development charges.

• During negotiations in and after 2008, Malaysia agreed or appeared to agree that development charges would be payable; therefore it cannot assert otherwise.

MALAYSIA ARGUED:

• A true interpretation of the POA would mean no development charges was payable.

• The POA already specified the nature of the development to be undertaken.

• The granting of planning permission did not enhance the value of the parcels; the value was enhanced under the POA, which obliges Singapore to permit the land be used for development.

• Malaysia never agreed development charges were payable on the parcels.

Arbitral Tribunal decides Malaysia not liable to pay tax on former Malayan Railway land
Today Online 31 Oct 14;

Joint statement on the Award of the Arbitral Tribunal on the issue of Development Charges Relating To The Former Malayan Railway Land Under The Points Of Agreement On Malayan Railway Land In Singapore:

In September 2010, the Prime Ministers of Singapore and Malaysia announced that both countries had different views relating to the development charges on the three parcels of Points of Agreement (POA) land in Tanjong Pagar, Kranji and Woodlands. Both Leaders agreed to settle the issue amicably through arbitration and agreed to accept the arbitration award as final and binding.

In January 2012, Singapore and Malaysia entered into an agreement, submitting the issue to final and binding arbitration. The Permanent Court of Arbitration acted as Registry in this arbitration. The arbitration proceedings were conducted in accordance with the procedural rules agreed to by Malaysia and Singapore, and before a three person Arbitral Tribunal appointed by the countries.

The Arbitral Tribunal delivered its award on 30 October 2014. It decided that M+S Pte Ltd would not have been liable to pay development charges on the Keppel, Kranji and Woodlands parcels if the said parcels had been vested in M+S Pte Ltd and if M+S Pte Ltd had actually developed the lands in accordance with the proposed land uses set out in the Annexes to the POA.

Both Singapore and Malaysia are satisfied with the arbitral process and affirm that both countries were afforded the opportunity to fully present their case on the issue. Singapore and Malaysia have agreed to abide by and fully implement the decision of the Tribunal. By resolving this matter through third party arbitration, both countries have demonstrated our common commitment to settling disputes in an amicable manner, in accordance with international law. The full and successful implementation of the POA has paved the way for joint development projects and closer collaboration between Singapore and Malaysia. Both countries look forward to working closely together to further strengthen and broaden our bilateral cooperation.

Ministry of Foreign Affairs, Malaysia

Ministry of Foreign Affairs, Singapore

PM Lee: Singapore fully accepts the Tribunal’s decision
Today Online 31 Oct 14;

In response to media queries on the award of the arbitral tribunal constituted under the auspices of the Permanent Court of Arbitration (the Arbitral Tribunal) on the issue of development charges relating to the former Malayan Railway land under the Points of Agreement (POA) on Malayan Railway land in Singapore, Prime Minister Lee Hsien Loong said:

“This was an issue left over from the Points of Agreement (POA) which was signed in 1990. There was a question of whether development charge was payable on the three parcels of POA land in Tanjong Pagar, Kranji, and Woodlands. Prime Minister Najib and I agreed to resolve it through arbitration. This has been done, and the Tribunal has decided that development charge was not payable.

Singa­pore fully accepts the Tribunal’s decision. It allows us to put this matter behind us. I am happy that Singapore and Malaysia have been able to resolve this dispute in this impartial and amicable way.

The full and successful implementation of the POA in 2011 has paved the way for joint development projects and closer collaboration between Singapore and Malaysia. These include links in transport connectivity, and trade and investment. I look forward to making progress on them, and working with PM Najib bilaterally, and in ASEAN to benefit both countries.”

Tribunal resolves issue involving Malaysia-Singapore joint venture company
The Star/Asia News Network AsiaOne 1 Nov 14;

PETALING JAYA: An international arbitral tribunal has decided that the Malaysia-Singapore joint venture company, M+S Pte Ltd, need not pay a development charge on the three parcels of former KTM Bhd land in the island republic.

The decision came four years after the Malaysian and Singaporean governments decided to refer to the Permanent Court of Arbitration whether the development charge should be imposed on the original land.

The foreign ministries of Malaysia and Singapore in a joint statement yesterday said that both countries were satisfied with the arbitral process and have agreed to abide by and fully implement the decision of the tribunal.

M+S Pte Ltd is a joint venture company 60% owned by Khazanah Nasional Bhd, while Singapore's Temasek Holdings has the other 40% stake.

"The arbitral tribunal decided that M+S Pte Ltd would not have been liable to pay development charges on the Keppel, Kranji and Woodlands parcels if the said parcels had been vested in M+S Pte Ltd and if M+S Pte Ltd had actually developed the lands in accordance with the proposed land uses set out in the Annexes to the POA," according to the statement.

In September 2010, the Prime Ministers of Singapore and Malaysia announced that both countries had different views relating to the development charges on the three parcels of Points of Agreement (POA) land in Tanjong Pagar, Kranji and Woodlands.

They agreed to settle the issue amicably through arbitration and agreed to accept the arbitration award as final and binding.

In January 2012, Singapore and Malaysia entered into an agreement, submitting the issue to final and binding arbitration.

The Permanent Court of Arbitration acted as Registry in this arbitration.

The arbitration proceedings were conducted in accordance with the procedural rules agreed to by Malaysia and Singapore before a three-man arbitral tribunal appointed by the countries. The tribunal delivered its decision on Thursday.

In Singapore, Prime Minister Lee Hsien Loong in an immediate reaction said the decision would allow both countries to put the matter behind them.

"I am happy that Singapore and Malaysia have been able to resolve this dispute in this impartial and amicable way.

"This was an issue left over from the Points of Agreement (POA) which was signed in 1990. There was a question of whether development charge was payable on the three parcels of POA land in Tanjong Pagar, Kranji, and Woodlands.

"Prime Minister (Datuk Seri) Najib (Tun Razak) and I agreed to resolve it through arbitration. This has been done, and the Tribunal has decided that development charge was not payable," he said.

Lee said the full and successful implementation of the POA in 2011 had paved the way for joint development projects and closer collaboration between Singapore and Malaysia.

"These include links in transport connectivity, and trade and investment. I look forward to making progress on them, and working with PM Najib bilaterally, and in Asean to benefit both countries," Lee added.