11 Jun 2002

Taikoo Shing Arbitration Award Appeal

Swire Properties Ltd., a wholly-owned subsidiary of Swire Pacific Limited, confirmed today that the Court of Appeal refused leave to appeal on a point of law regarding the Government's right to charge premium for certain of the commercial buildings constructed at Taikoo Shing.

The company is deeply disappointed with this decision but will consider its options before deciding how to proceed. As previously announced, the company will not offer any comment until the final outcome of the proceedings is decided.

About the arbitration:-

the HKSAR Government Lands Department's claim for payment of land premium and interest in relation to the Cityplaza Four, Cityplaza Three and Cityplaza One office towers, as well as the Horizon Gardens residential scheme at Taikoo Shing, was upheld in an arbitration award announced in January 2001. Swire Properties has commenced an appeals process. The amount payable in respect of the office towers would still have to be agreed and failing agreement, would be assessed by independent experts. Given the uncertainty, the amount of HK$4,500 million which, as a matter of prudence was accrued in the Swire Pacific group accounts as at 31st December 2000, remains the best estimate of the group's exposure.

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