Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 29 May 2020
• Neutral Citation: [2020] SGHC 113
• Court: High Court (Singapore)
• Docket Number: Originating Summons Nos 1385 of 2019 and 1257 of 2019 (Summons No 6218 of 2019)
• Year: 2020
• Published date: 03 June 2020
• Hearing Date: 05 February 2020,04 February 2020,07 February 2020
• Plaintiff Counsel: Alvin Yeo SC, Lionel Leo and Daryl Wong (WongPartnership LLP)
• Defendant Counsel: Cavinder Bull SC (Drew & Napier LLC) (instructed), Aaron Lee Teck Chye and Marc Malone (Allen & Gledhill LLP)
• Subject Matter: Arbitration,Enforcement,Singapore-seated award,Award,Recourse against award,Setting aside
• Citation: [2020] SGHC 113

Belinda Ang Saw Ean J: Introduction

Originating Summons No 1385 of 2019 (“OS 1385”) is an application by the plaintiffs, Bloomberry Resorts and Hotels Inc (“BRHI”) and Sureste Properties Inc (“Sureste”) (collectively, “Bloomberry”), to set aside an award on quantum dated 27 September 2019 (the “Final Award”) that was issued in favour of the defendants, Global Gaming Philippines LLC (“GGAM Philippines”) and GGAM Netherlands BV (“GGAM Netherlands”). GGAM Philippines and GGAM Netherlands are hereafter referred to collectively as “GGAM”.

In the alternative, Bloomberry challenges the enforcement of the Final Award in Singapore under Summons No 6218 of 2019 (“SUM 6128”) that was filed in Originating Summons No 1257 of 2019 (“OS 1257”). On 9 October 2019, GGAM sought leave to enforce the Final Award in OS 1257 and the court granted leave on 10 October 2019. In SUM 6128, Bloomberry seeks to set aside the leave order to enforce the Final Award in Singapore (“the Leave Order”).

For context, the Final Award follows an earlier award on liability dated 20 September 2016 (the “Partial Award”). Bloomberry’s applications to set aside and resist enforcement of the Partial Award in Singapore were dismissed. The High Court’s decision can be found in Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another [2020] SGHC 1 (the “2020 Judgment”). Notwithstanding the High Court’s decision in the 2020 Judgment, Bloomberry argues that there are additional grounds for setting aside the Final Award and, to this end, relies on the same grounds for both its application to set aside the Final Award and its application to set aside the Leave Order. I elaborate on these further grounds at [8] below.

The awards

It is helpful to begin with a brief summary of the Partial Award, which a three-member arbitral tribunal (the “Tribunal”) issued in a Singapore-seated arbitration (the “Arbitration”) governed by the UNCITRAL Arbitration Rules (as revised in 2010) (“UNCITRAL Rules”). After the liability hearing, the Tribunal (in the Partial Award) found in favour of GGAM (the claimants in the Arbitration) for wrongful termination of a Management Services Agreement dated 9 September 2011 (the “MSA”). The MSA pertained to the provision of management and technical services in the development, construction and operation of the Solaire Resort & Casino (“Solaire”) in the Philippines. Relevant to the current applications is the Tribunal’s rejection (in the Partial Award) of Bloomberry’s claims that: (a) GGAM should return to Bloomberry shares that GGAM had acquired in Bloomberry Resorts Corporation (“BRC”) on 20 December 2012 (the “Shares”); and (b) GGAM would be unjustly enriched if permitted to sell the Shares. In the Partial Award, the Tribunal ordered that Bloomberry had no grounds to challenge GGAM’s title to the Shares and that GGAM could exercise its rights in relation to the Shares, including the right to sell them. It was on the basis of these findings on the legal and beneficial ownership of the Shares in the Partial Award that the Tribunal consequently granted GGAM relief in the Final Award.

The hearing on remedies took place from 28 May 2018 to 1 June 2018 and the Tribunal issued the Final Award on 27 September 2019. Among other points of contention, the dispute concerning Bloomberry’s purported obstruction of the sale of the Shares was contested strenuously: see [374]–[474] of the Final Award. In essence, GGAM argued that Bloomberry blocked the sale of the Shares, while Bloomberry responded that it did so because the MSA had been validly terminated. Bloomberry also contended that a “Philippine preliminary injunction and attachment” (see [17] below) over the Shares remained in place and continued to restrain the disposal of the Shares.

In the Final Award, the Tribunal ordered Bloomberry to pay GGAM the following: (a) US$85.2m as damages for lost management fees; (b) US$391,224 as damages for pre-termination fees and expenses; (c) US$14,998,052 as costs; and (d) interest. Moreover, at [507(c)] of the Final Award, the Tribunal granted GGAM’s further request for a “Constructive Remedy” in respect of Bloomberry’s continued interference with GGAM’s sale of the Shares. Pursuant to the Constructive Remedy, the Tribunal ordered Bloomberry to buy the Shares based on their value as of 9 December 2014. The Constructive Remedy is set out in [507(c)]–[507(e)] of the Final Award and is reproduced below:

…

(c) In relation to the damages for [Bloomberry’s] wrongful interference with the Shares: 1. [Bloomberry] shall pay to GGAM Philippines, within thirty (30) days from the date of this Final Award, PHP 10,169,871,978.24 …, representing the full value of the Shares; 2. As a condition for this payment, [GGAM] shall take all necessary steps to release all ownership or other interests in the Shares to [Bloomberry] and transfer all such ownership to [Bloomberry] or their designee within five (5) business days from the date of such payment by [Bloomberry]; 3. If [Bloomberry] do not pay GGAM Philippines for the Shares within thirty (30) days from the date of this Final Award, GGAM Philippines may sell its Shares on the market (the ‘Share Sale’). If the sale nets more than 10,169,871,978.24 PHP, then GGAM Philippines may retain the damages amount and pay the excess (the remainder) to [Bloomberry]. If the sale nets less than this amount, then GGAM may retain all proceeds and [Bloomberry] shall owe GGAM the difference. (d) if [Bloomberry] do not pay the amount set out in (c) above within thirty (30) days from the date of this Final Award: 1. [Bloomberry] shall take all steps necessary (including directing their agent and controlling shareholder PMHI to cooperate) to file a motion to withdraw the original Petition seeking the writs of preliminary injunction and attachment in the Regional Trial Court within thirty-seven (37) days from the date of this Final Award. 2. [Bloomberry] shall take all steps necessary (including directing their agent and controlling shareholder PMHI to cooperate) to issue the joint press release in substantially the same form set forth in Annex A to [GGAM’s] Supplemental Submission within thirty-seven (37) days from the date of this Final Award. 3. [Bloomberry] shall, within thirty-seven (37) days from the date of this Final Award, take all steps necessary (including directing their agent and controlling shareholder PMHI to cooperate) to instruct the Philippine Depository & Trust Corporation, the Philippine Stock Exchange, Deutsche Bank and the market that GGAM has free and clear title to the Shares and the absolute right to sell the Shares, and to instruct Deutsche Bank to transfer the Shares to an unrestricted trading account. (e) [Bloomberry] shall take all steps necessary to facilitate the release of the dividends on the Shares in the amount of PHP 193,448,652 to GGAM Philippines within twenty-one (21) days from the date of this Final Award. In particular, [Bloomberry] shall submit a certified letter from their affiliate Bloomberry Resorts Corporation addressed to Deutsche Bank that states as follows:

‘[BRC], [BRHI], [Sureste] and Prime Metroline Holdings, Inc. have no objection to Deutsche Bank AG’s immediate release of all dividends paid by [BRC] for the account of [GGAM Philippines].’

If these dividends are released to GGAM Philippines within the twenty-one (21) days, then the amount of damages for the shares (PHP 10,169,871,978.24) shall be reduced by the value of the dividends (PHP 193,448,652). If [Bloomberry] fail to timely facilitate the release of the dividends, then the amount of damages owed by [Bloomberry] for the Shares shall remain PHP 10,169,871,978,24.

…

[emphasis in original]

Clearly, the Tribunal made “such orders as [were] reasonably necessary to give effect to [the Constructive Remedy]”: see Final Award at [472]. For instance, the alternative relief “[would] become effective only if [Bloomberry] refuse[d] to comply with the damages award for the Shares within thirty (30) days of the date of [the Final Award]” and “[would] only have the effect of enabling [GGAM] to sell the Shares to remedy the damages they suffered”: see Final Award at [474]. In the event, Bloomberry were required to take all steps necessary to enable GGAM to sell the Shares such as directing Bloomberry’s agent and controlling shareholder Prime Metroline Holdings Inc (“PMHI”) to cooperate.

The parties’ arguments

Bloomberry argues that even though the Partial Award was not set aside in the 2020 Judgment, there are further grounds to set aside the Final Award under s 24 of the International Arbitration Act (Cap 143A, Rev Ed 2002) (“IAA”) and Art 34 of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”) as set out in the First Schedule to the IAA: First, the “Constructive Remedy” ordered in the Final Award relates to matters outside the scope of the parties’ submission to arbitration because: (i) it causes a non-party to the MSA to effectuate the Final Award; and (ii) it is a punitive remedy expressly disallowed by the terms of the arbitration agreement in the MSA. Second, there was a breach of natural justice because: (i) the Tribunal refused to consider evidence material to remedies on the basis that it could not revisit liability; (ii) the Tribunal refused to apply its mind to Bloomberry’s demonstration that GGAM had committed procedural fraud; and (iii) GGAM made deliberate concealments in document production that were relevant for assessing damages arising from termination of the MSA. Third, the grant of damages to GGAM Netherlands is contrary to the public policy of Singapore because it upholds tax evasion fraud in the Philippines.

In the alternative, Bloomberry relies on the same further grounds for resisting enforcement of the Final Award, citing analogous...