International Petroleum Investment Company (IPIC), an Abu Dhabi sovereign wealth fund, will not comply with a ruling by an international arbitrator directing it to sell control of a South Korean oil refining company because it says the ruling lacks legal grounding. The dispute concerns a move by Hyundai Heavy Industries to regain control of Hyundai Oilbank after IPIC tried to sell part of its 70 per cent interest to third parties. "The arbitral award has no legal effect unless and until Hyundai shareholders obtain a final enforcement judgment from the Korean courts," IPIC said. The company believes the award to be unenforceable in South Korea due to errors in key factual and legal conclusions. It did not elaborate. Company officials were unavailable for comment yesterday. The Paris-based International Chamber of Commerce (ICC) declined to discuss a ruling issued last week by its arbitration court in Singapore requiring IPIC to sell its Oilbank stake for 2.6 trillion South Korean won (Dh8.92 billion). Hyundai Heavy, the world's biggest ship builder, said it and affiliated Hyundai shareholders would take the "necessary legal steps" to acquire the IPIC stake in Oilbank and management control of the refiner. It also said it would hold IPIC accountable for damages from the delayed deal. "There has been no case in the past where the decision by the arbitration court under the ICC has been reversed by a South Korean court," Hyundai Heavy said. Oilbank, South Korea's smallest oil refiner, has the capacity to process 390,000 barrels per day of crude. IPIC bought 50 per cent of the company from Hyundai Heavy in 1999 after the Asian financial crisis. It acquired the right to buy another 20 per cent of Oilbank from the ship builder in 2003 and carried out the purchase three years later. However, IPIC tried in 2007 to sell part of its Oilbank holding to third parties believed to have included the South Korean conglomerates GS Group and Lotte Group. Hyundai Heavy, which currently owns 19.2 per cent of Oilbank, claimed the move breached an agreement with its shareholders and said it would exercise an option to buy back IPIC's stake. IPIC invited Hyundai Heavy to make an offer for the Oilbank shares before attempting to sell them on, it said. It alleged that Hyundai Heavy shareholders had obstructed the bidding process "by creating groundless legal disputes and procedural obstacles" and had themselves "materially breached" the shareholder agreement. It said in April it would seek to buy the remaining 30 per cent of Oilbank held by Hyundai affiliates. Hyundai Heavy does not anticipate any difficulty in financing the purchase of Oilbank shares ordered by the ICC, it said last week. IPIC invests internationally in oil-related projects for the Abu Dhabi Government, mostly in the refining and petrochemicals sectors. It has shown signs in recent months of shifting its regional investment focus to Asia amid diplomatic efforts by Abu Dhabi to strengthen political and trade ties with Asia-Pacific oil importers. @Email:tcarlisle@thenational.a