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

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 03 January 2020
• Neutral Citation: [2020] SGHC 1
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 1432 of 2017
• Published date: 03 March 2021
• Year: 2020
• Hearing Date: 20 September 2018,24 October 2018,21 May 2019,22 May 2019,23 May 2019,19 September 2018,24 July 2019
• Plaintiff Counsel: Yeo Khirn Hai Alvin SC, Leo Zhen Wei Lionel, Reka Mohan and Nurul Ayu Fajarani (Wong Partnership LLP)
• Defendant Counsel: Cavinder Bull SC and Kong Man Er (Drew & Napier LLC) (instructed counsel), Aaron Lee Teck Chye, Marc Wenjie Malone and Cheryl Chong (Allen & Gledhill LLP)
• Subject Matter: Arbitration,Enforcement,Singapore-seated award,Award,Recourse against award,Setting aside,Civil procedure,Extension of time
• Citation: [2020] SGHC 1

Belinda Ang Saw Ean J: Introduction

Bloomberry Resorts and Hotels Inc. (“Bloomberry”), and Sureste Properties, Inc (“Sureste”), the first and second plaintiffs in Originating Summons 1432 of 2017 (“OS 1432”), are challenging a Partial Award on liability issued by a three-member arbitral tribunal (“the Tribunal”) on 20 September 2016. The first and second defendants in OS 1432 were the claimants in a Singapore-seated arbitration that was commenced in 2013 and governed by the United Nations Commission on International Trade Law (“UNCITRAL”) Arbitration Rules 2010 (“the Arbitration”). The plaintiffs were the respondents in the Arbitration. The Tribunal found in favour of the first and second defendants, Global Gaming Philippines LLC (“GGAM”), and GGAM Netherlands B.V. (“GGAM Netherlands”) respectively, for wrongful termination of the Management Services Agreement dated 9 September 2011 (“the MSA”).

By the Partial Award, the Tribunal found, inter alia, that there were no misrepresentations by the defendants that induced the plaintiffs to enter into the MSA. The Tribunal noted that to justify rescission of the MSA on account of causal fraud under Philippines Law, the fraud must be serious, and must have operated at the time of the making of the MSA. In addition, evidence of fraud must be “full, clear and convincing” (see [127] of the Partial Award). The Tribunal also held that the plaintiffs’ grounds for termination of the MSA were not made out and thus, their purported termination of the MSA was wrongful.

In OS 1432, the plaintiffs refer to evidence of fraud and/or corruption, which they assert were not discoverable until months after the Partial Award was issued on 20 September 2016. The argument here as regards the basis of the fraud allegations is that evidence was adduced in the Arbitration by the defendants which has now been shown to be false – not merely in the sense that it was incorrect, but in the sense that it was known by the defendants to be false – and had therefore been submitted fraudulently. According to the plaintiffs, the evidence of fraud and/or corruption was eventually revealed through the findings in two orders: (a) the 19 January 2017 Non-Prosecution Agreement between the US Department of Justice (“DOJ”) and Las Vegas Sands (“LVS”) (“the DOJ Agreement”); and (b) the 7 April 2016 Order by the US Securities and Exchange Commission (“SEC”) instituting cease–and–desist proceedings against LVS (“the SEC Order”). The DOJ Agreement and the SEC Order are collectively referred to hereafter as the “FCPA Findings”. The plaintiffs characterise their fraud allegations as procedural fraud (eg, fraud by a party, suppression of documentary evidence or perjury) constituting a ground for setting aside and a bar to the enforcement of the Partial Award. They also characterise the FCPA Findings as “new evidence” of the defendants’ fraud even though the new evidence came into existence after the Partial Award was rendered. The new evidence was discovered, subsequently, post-award and the plaintiffs argue that the new evidence serve to establish that the Partial Award was based on wrong or incomplete facts owing to deliberate suppression or concealment of evidence and the new evidence would have influenced the way the plaintiffs’ case was presented to the Tribunal (“the new evidence argument”). On either characterisation, this court should set aside the Partial Award and refuse enforcement since the procedural fraud and new evidence argument would have affected the Tribunal, the arbitral proceedings and/or the Partial Award.

Basically, the plaintiffs’ substantive applications in OS 1432 are: To set aside the Partial Award under s 24 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”) and Art 34(2) of the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) as set out in the First Schedule of the IAA; Alternatively, to resist the enforcement of the Partial Award in Singapore. The challenge to enforcement of the Partial Award is on the main ground that the Partial Award is contrary to Singapore public policy under Art 36(1)(b)(ii) of the Model Law. The secondary ground that is relied upon is Art 36(1)(a)(ii), ie, the plaintiffs were unable to present its case by reason of the fraud committed by the defendants in the conduct of the arbitral proceedings in multiple respects such as the suppression of critical evidence and deception of the Tribunal.

The first substantive issue concerns the validity of the Partial Award in that the Partial Award was induced or affected by fraud or the way in which it was procured is contrary to public policy in that the defendants had concealed documentary evidence or committed perjury with the dishonest intention to deliberately mislead the Tribunal and/or the plaintiffs. The alternative substantive issue for this court in the present proceedings to determine is whether, if the plaintiffs’ fraud allegations are established on the new evidence (ie, the FCPA Findings), it would be contrary to Singapore public policy to permit enforcement of the Partial Award in this jurisdiction.

OS 1432 was commenced out of time after the expiry of the three-month time limit in Art 34(3) of the Model Law. In addition, the permissible time limit to set aside HC/ORC 6609/2016 dated 27 September 2016, which is the order made in Originating Summons No 979 of 2016 (“OS 979”) granting leave of court to enforce the Partial Award in Singapore, had also expired. Consequently, on 20 June 2017, HC/JUD 355/2017 was filed against the plaintiffs in terms of the Partial Award (hereafter referred to as “the Enforcement Judgment”). HC/ORC 6609/2016 and the Enforcement Judgment are collectively referred to hereafter as “the enforcement orders”. The plaintiffs now seek an extension of time: (a) to set aside the Partial Award; and (b) to set aside the enforcement orders. In both instances of delay, the plaintiffs rely on the common ground that the fraud that induced or affected the making of the Partial Award was only discovered after the relevant timelines had expired.

I propose to deal with the extension of time applications before considering the applicable legal principles, the details of the evidence before the court on the substantive applications and my decision on the issues. It is fair to state that the time extensions to set aside the Partial Award and challenge to the enforcement orders, if granted, will shape the grounds of challenge in the present application.

Mr Alvin Yeo, SC (“Mr Yeo”) represents the plaintiffs and Mr Cavinder Bull, SC (“Mr Bull”), represents the defendants.

Background Facts

A brief outline of the parties and the procedural history is helpful before turning to consider the extension of time applications.

Parties

The first plaintiff, Bloomberry, and second plaintiff, Sureste, are the owners of the Solaire Resort & Casino (“Solaire”), a luxury hotel and gaming resort located in Manila, Philippines. The second plaintiff is wholly owned by Bloomberry Resorts Corporation, a listed company in the Philippines.

The first defendant, GGAM is the sole owner of the second defendant, GGAM Netherlands. During the period in issue, the defendants had four senior executives: Mr William P. Weidner (“Mr Weidner”) as the Chairman and Chief Executive Officer (“CEO”), Mr Bradley Stone (“Mr Stone”) as the President, Mr Garry W. Saunders (“Mr Saunders”) as the Executive Vice President and Mr Eric Chiu (“Mr Chiu”), President for Asia.

In turn, GGAM is a wholly-owned subsidiary of Global Gaming Asset Management LP, a firm that develops, invests, manages and advises hospitality companies and projects, with an emphasis on the casino sector. Global Gaming Asset Management LP is a joint venture between an entity owned and controlled by Mr Weidner, Mr Stone and Mr Saunders, and a subsidiary of Cantor Fitzgerald LP (“Cantor Fitzgerald”), a global financial services firm.

Procedural history

The plaintiffs and GGAM entered into the MSA on 9 September 2011 “to provide management and technical services in the development and construction, and to manage the operation of” Solaire for a period of 10 years.¹ GGAM subsequently transferred all its rights, titles, benefits, privileges, obligations and interest under the MSA to GGAM Netherlands, the second defendant, under an Assignment and Assumption Agreement dated 8 March 2013. For ease of reference, GGAM, where used in the judgment below, is taken to refer to GGAM Netherlands as well as no distinction needs to be made between the two for the present case.

Subsequently, for reasons that will be explained below, the plaintiffs sought to terminate the MSA. The defendants duly commenced arbitration against the plaintiffs pursuant to cl 19.2 of the MSA. On 20 September 2016, following the hearings on liability in October 2015, the Tribunal decided in the Partial Award that, inter alia, there was no causal fraud or misrepresentation by the defendants in relation to the MSA and that the plaintiffs’ termination of the MSA was not justified and constituted a breach of the MSA.

The SEC Order was published on 7 April 2016 and the DOJ Agreement was published on 17 January 2017.

As highlighted earlier, HC/ORC 6609/2016 was made in OS 979 on 27 September 2016. HC/ORC 6609/2016 was served on the second plaintiff and the first plaintiff on 4 January 2017 and 10 March 2017 respectively. The defendants filed the Enforcement Judgment in terms of the Partial Award on 20 June 2017.

On 21 December 2017, the defendants filed OS 1432 seeking to, inter alia, set aside the Partial Award or, in the alternative, to challenge the enforcement of the Partial Award.

Time extension applications

As mentioned earlier, OS 1432 was filed out of time after the expiry of two different and separate timelines. The first concerns the three-month time limit in Art 34(3) of the Model Law, and the second...