Lao Holdings NV v Government of the Lao People's Democratic Republic and another matter

CourtInternational Commercial Court (Singapore)
JudgeQuentin Loh JAD
Judgment Date13 April 2022
Neutral Citation[2022] SGHC(I) 6
Citation[2022] SGHC(I) 6
Docket NumberOriginating Summonses Nos 5 and 6 of 2020
Plaintiff CounselLin Weiqi Wendy, Chong Wan Yee Monica (Zhang Wanyu), Ling Jia Yu (Lin Jiayu) and Ho Yi Jie (WongPartnership LLP)
Defendant CounselCavinder Bull SC, Lim Gerui, Tan Yuan Kheng (Chen Yuanqing), Lim Qiu Yi Regina and Tan Sih Si (Chen Shisi) (Drew & Napier LLC)
Quentin Loh JAD, Vivian Ramsey IJ and Douglas Jones IJ: Introduction

This is our judgment on the issue of costs in SIC/OS 5/2020 and SIC/OS 6/2020 (“OS 5” and “OS 6” respectively, and “the Applications” collectively), following our dismissal of the Applications to set aside an International Centre for Settlement of Investment Disputes (“ICSID”) arbitration award and a Permanent Court of Arbitration (“PCA”) award respectively in Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matter [2021] 5 SLR 228 (“the Judgment”), and in HC/SUM 5593/2019 and HC/SUM 5579/2020 (“the Sealing Applications” collectively).

Background

The facts relating to the dispute between the parties have been canvassed extensively in the Judgment. In the following, we restate only the material facts, and highlight aspects of this long-standing dispute that are relevant to the issue of costs. Unless otherwise specified, we adopt the same terms as defined in the Judgment.

Background to the dispute

The plaintiffs in OS 5 and OS 6 respectively are Lao Holdings NV (“LH”) and its wholly-owned subsidiary, Sanum Investments Ltd (“Sanum”). The plaintiffs had partnered with a Laotian conglomerate, ST Group Co Ltd (“ST Group”) and its related entities and individuals to conduct business in the Laotian gaming and hospitality industry. By late 2011, relations between the plaintiffs and ST Group had deteriorated substantially, resulting in litigation in Laos and a disruption to the plaintiffs’ business. Subsequently, the plaintiffs pursued claims against ST Group in a separate set of arbitration proceedings at the Singapore International Arbitration Centre (what we referred to as the “ST SIAC Arbitration” in the Judgment). Those proceedings spawned a series of proceedings in the Singapore courts as well, resulting in the decisions in Sanum Investments Limited v ST Group Co, Ltd and others [2020] 3 SLR 225, ST Group Co Ltd and others v Sanum Investments Ltd and another appeal [2020] 1 SLR 1 and ST Group and others v Sanum Investments Limited [2022] SGCA 2.

Additionally, the plaintiffs claimed that officials from the Government of the Lao People’s Democratic Republic (“GOL”), the defendant in the Applications, had reneged on earlier commitments and conducted themselves in an arbitrary and discriminatory fashion, enriching themselves and ST Group at the plaintiffs’ expense. As such, on 14 August 2012, the plaintiffs initiated two arbitrations against GOL (the “BIT Arbitrations”): (a) LH initiated the ICSID Arbitration under the Laos-Netherlands BIT; and (b) Sanum initiated the PCA Arbitration under the Laos-PRC BIT. In the BIT Arbitrations, LH and Sanum raised various allegations concerning GOL’s conduct in relation to various projects that they had embarked upon. In response, GOL raised a threshold defence that their claims should not be entertained given the evidence of bribery, corruption, and embezzlement, in addition to arguing that the plaintiffs’ claims lacked merit.

While no specific finding has been made on the amounts due from GOL (since the BIT Tribunals ruled against the plaintiffs on all their claims), it is worth noting that on the plaintiffs’ own case, the relief that they would have been entitled to would be in excess of US$690m (for LH)1 and US$891m (for Sanum),2 as indicated in the relief requested in their pleadings for the BIT Arbitrations. These figures show that at least US$1.58bn – a sum that did not include what would likely have been substantial interest – was at stake in this dispute.

Procedural history

Although we were concerned, in the Applications, with what may be considered the tail-end of the parties’ dispute, it is important to see the proceedings before us in the light of the almost decade-long saga that has transpired between the parties. As we will come to below, this has an impact on how we view the reasonableness of the costs incurred in the Applications. We reproduce here a timeline of key events that we had set out in our Judgment at [14]:

S/N Date Event
1. 14 August 2012 LH and Sanum file their respective Notices of Arbitration
2. 9 August 2013 GOL files jurisdictional objection in the PCA Arbitration
3. 13 December 2013 PCA Tribunal finds that it has jurisdiction
4. 10 January 2014 GOL files HC/OS 24/2014 to challenge the PCA Tribunal’s ruling on jurisdiction
5. 15 June 2014 The plaintiffs and GOL enter into the Settlement Deed, together with a Side Letter executed on 18 June 2014
6. 19 June 2014 Consent orders are signed by the BIT Tribunals to suspend the BIT Arbitrations
7. 4 July 2014 The plaintiffs file applications in the BIT Arbitrations alleging that GOL had materially breached the Settlement Deed’s terms (“the First Material Breach Applications”)
8. 20 January 2015 The Singapore High Court releases judgment in HC/OS 24/2014: Government of the Lao People’s Democratic Republic v Sanum Investments Ltd [2015] 2 SLR 322 (“GOL v Sanum (HC)”), disagreeing with the PCA Tribunal on its ruling on jurisdiction
9. 10 June 2015 The First Material Breach Application is dismissed by the ICSID Tribunal (the PCA Arbitration was held in abeyance given the High Court’s decision in GOL v Sanum (HC))
10. 26 April 2016 LH files a second application in the ICSID Arbitration to revive the proceedings on the basis of GOL’s material breaches of the Settlement Deed
11. 29 September 2016 The Singapore Court of Appeal reverses the High Court’s decision and reinstates the PCA Tribunal’s ruling on jurisdiction: Sanum Investments Ltd v Government of Lao People’s Democratic Republic [2016] 5 SLR 536 (“Sanum v GOL (CA)”). Sanum files a second application in the PCA Arbitration to revive the proceedings on grounds mirroring LH’s 26 April 2016 application.
12. 15 December 2017 The BIT Tribunals (respectively) grant both applications to revive the proceedings. The BIT Arbitrations are revived.
13. 15 May 2018 GOL files a formal application to adduce additional evidence to the BIT Tribunals (“GOL’s Application for Additional Evidence”)
14. 30 May 2018 The plaintiffs file submissions objecting to GOL’s Application for Additional Evidence
15. 25 June 2018 BIT Tribunals decide to admit all the evidence relating to GOL’s allegations of bribery, corruption and fraud: PCA Tribunal’s Procedural Order No 9 (“PCA PO 9”) and ICSID Tribunal’s Procedural Order No 11 (“ICSID PO 11”)
16. 16 July 2018 The plaintiffs file an application to introduce further material to rebut GOL’s newly-admitted evidence (“Application for Rebuttal Evidence”)
17. 31 July 2018 BIT Tribunals allow the Application for Rebuttal Evidence in part: PCA Tribunal’s Procedural Order No 12 (“PCA PO 12”) and ICSID Tribunal’s Procedural Order No 14 (“ICSID PO 14”)
18. 10 August 2018 GOL applies to introduce, inter alia, the witness statement of Mr Angus Roderick Noble (“Noble WS”), owner and CEO of MaxGaming Consulting Services Limited (Macau) (“MaxGaming”)
19. 29 August 2018 BIT Tribunals allow the Noble WS to be admitted: PCA Tribunal’s Procedural Order No 13 (“PCA PO 13”) and ICSID Tribunal’s Procedural Order No 15 (“ICSID PO 15”)
20. 3–7 September 2018 Merits hearing of the BIT Arbitrations (heard by BIT Tribunals jointly) in Singapore
21. 17 July 2019 Proceedings in the BIT Arbitrations are declared closed
22. 6 August 2019 BIT Tribunals issue the BIT Awards dismissing the plaintiffs’ claims and ordering the plaintiffs to pay costs
23. 6 November 2019 The plaintiffs file applications to set aside the BIT Awards in the Singapore High Court in HC/OS 1389/2019 and HC/OS 1390/2019

We highlight that the BIT Awards dismissing the plaintiffs’ claim also included orders that (a) LH pay US$1,293,720.27 to GOL for the latter’s lawyer fees and expenses and US$481,662.95 as the latter’s share of arbitration costs (to reimburse GOL for the advance that it had paid);3 and (b) Sanum pay US$1,313,252.31 to GOL for the latter’s legal costs and US$465,000 as the latter’s share of arbitration costs (similarly, as reimbursement for the advance that GOL had paid).4 The aggregate sum of legal costs for the BIT Arbitrations due to GOL was therefore just over US$2.6m. For completeness, we note that the arbitration costs amounted to around US$1.735m5 and US$1.773m6 for the ICSID and PCA Arbitrations respectively, for a total of around US$3.5m, all of which was ordered to be borne by the plaintiffs.

It is apparent from the above that the Applications represent a culmination of more than nine years of arbitral and court proceedings, in which the plaintiffs have resolutely sought to vindicate the wrongs allegedly done to them, while GOL has, with no less vigour, sought to defend itself against these allegations. What began as two notices of arbitration in August 2012 spawned proceedings in Singapore (up to the Court of Appeal) on the issue of the PCA Tribunal’s jurisdiction, additional proceedings within the BIT Arbitrations concerning GOL’s material breaches of the Settlement Deed (the first of which, it might be noted, failed), and various procedural disputes, leading up to the issuance of the comprehensive BIT Awards dismissing the plaintiffs’ claims. The appeal against our decision in the Judgment is still pending. The Applications, therefore, can be understood to be among one of the plaintiffs’ last possible avenues of recourse in their attempts to seek relief against GOL, and, conversely, if GOL were to be successful in resisting the Applications, what may be the end of this lengthy and costly saga for GOL. We do not think it is an overstatement at all to say that the stakes were very high in these...

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