Sanum Investments Ltd and another v Government of the Lao People's Democratic Republic and others and another matter
Court | International Commercial Court (Singapore) |
Judge | Philip Jeyaretnam J |
Judgment Date | 01 June 2022 |
Neutral Citation | [2022] SGHC(I) 9 |
Citation | [2022] SGHC(I) 9 |
Published date | 04 June 2022 |
Hearing Date | 18 May 2022 |
Docket Number | Originating Summons No 6 of 2022 (Summons No 5882 of 2021) and Originating Summons No 7 of 2022 |
Plaintiff Counsel | Lin Weiqi Wendy, Chong Wan Yee Monica (Zhang Wanyu), Leau Jun Li (WongPartnership LLP) |
Defendant Counsel | Lim Gerui, Tan Yuan Kheng (Chen Yuanqing) and Tan Sih Si (Chen Shisi) (Drew & Napier LLC) |
Subject Matter | Arbitration,Award,Recourse against award,Setting aside,Enforcement |
This matter principally concerns an arbitral tribunal’s invocation of the doctrine of collateral estoppel under New York law, which precluded the reopening of certain issues in a Singapore seated arbitration. We consider, in accordance with established case law, that even if the tribunal had been wrong to do so, this would amount to no more than an error on the merits of the claim, and would not ground any challenge to the award. In this judgment, we explain why we have concluded this, as well as deal with arguments put forward to resist enforcement of part of the costs order made by the tribunal.
Background Lao Holdings NV (“LH”) and Sanum Investments Ltd (“Sanum”) (collectively, the “Investors”) took out SIC/OS 7/2022 (“OS 7”) to set aside an arbitral award (the “Award”) which found in favour of the Government of the Lao People’s Democratic Republic (“GOL”), San Marco Capital Partners LLC (“SM”) and Kelly Gass (“Gass”) (collectively, the “GOL Parties”). The Investors also filed a related application in SIC/OS 6/2022 (“OS 6”), HC/SUM 5882/2021 (“SUM 5882”), to set aside an
OS 7 and SUM 5882 are continuations of a long-running dispute relating to the Investors’ investments in the Lao People’s Democratic Republic (“Laos”), which has been the subject of numerous decisions from the Singapore courts: see,
Sanum, a company incorporated under the laws of the Macau Special Administrative Region of China (“Macau”), is a wholly-owned subsidiary of LH. LH is incorporated in the Netherlands.1 Both companies made investments in gaming assets (the “Gaming Assets”) in Laos. The Gaming Assets included the Savan Vegas Hotel and Casino Complex (“SV Casino”).2
Prior to events in 2015, the SV Casino was operated by a Laotian joint venture company, Savan Vegas and Casino Co. Ltd. (“SVCC”), which was 80% owned by Sanum and 20% owned by GOL.3 Following the breakdown of the relationship between GOL and the Investors, GOL appointed SM in 2015 to manage, sell and market the Gaming Assets, including the SV Casino. Gass is the President of SM.4
Dispute historyOn 14 August 2012, the Investors each commenced arbitration against GOL pursuant to a PRC-Laos bilateral investment treaty and a Laos-Netherlands bilateral investment treaty respectively. The arbitral proceeding between Sanum and GOL was administered by the Permanent Court of Arbitration (“PCA”) while the arbitral proceeding between LH and GOL was administered by the International Centre for Settlement of Investment Disputes (“ICSID”). These arbitrations are collectively referred to as the “BIT Arbitrations”.5
To put an end to these disputes, a settlement deed (the “Settlement Deed”) was executed on 15 June 2014 under which the Investors agreed to take steps to sell the Gaming Assets, including the SV Casino, to a third party.6 The sale was to be effected within ten months after 15 June 2014 (
The Investors failed to sell the Gaming Assets by 15 April 2015. Pursuant to the Settlement Deed, GOL entered into a contract (the “Contract”) with SM on 16 April 2015 for the management, sale and marketing of the Gaming Assets. The Contract, which was effective from 15 March 2015, was signed by Gass on behalf of SM.9 On 28 September 2015, GOL issued a decree transferring all the assets owned by the SVCC to Savan Lao, a new entity that was solely owned by GOL, in order to accomplish the sale of the SV Casino. The SV Casino was eventually sold to Macau Legend on 30 August 2016 for US$42 million.10
The Settlement Deed failed to resolve parties’ differences and itself spawned protracted legal battles in multiple forums.
I, in my individual capacity and as the sole member and manager of [SM], consent and submit to SIAC arbitration in Singapore, where [the Investors] agreed to arbitrate disputes pursuant to the Settlement Deed.
SIAC Arbitration 414 was commenced by the Investors on 19 December 2017. In this proceeding, the Investors asserted claims for breach of fiduciary duty, breach of contract and conversion of property against SM and Gass.19
GOL filed an application for joinder on 3 February 2018. This application was granted by the Court of Arbitration of the SIAC on 9 April 2018 (despite the Investors’ opposition) and GOL was thereafter joined as the third respondent.20 After the tribunal (the “Tribunal”) for SIAC Arbitration 414 was constituted, the Investors raised a jurisdictional objection to the joinder of GOL, claiming that the Tribunal did not have jurisdiction over GOL. This was met with opposition from SM and Gass.21 After hearing both sides, the Tribunal issued its decision on 25 October 2018 concluding that it had jurisdiction over GOL.22
A procession of pleadings followed:
In between the filing of the Statement of Claim and Statement of Defence, the GOL Parties filed an application for security for costs on 22 August 2019.27 The Investors filed their response on 5 September 2019.28 On 23 September 2019, the Tribunal denied the application for security for costs.29
The merits hearing of SIAC Arbitration 414 took place from 26 July to 1 August 2020,30 and issues of costs were dealt with thereafter:
On 9 June 2021, the Tribunal closed the proceedings.34
On 11 August 2021, the Tribunal issued the Award dismissing the Investors’ claims in their entirety.35 In particular, the Tribunal dismissed the Investors’ claims against SM and Gass for breach of fiduciary and contractual duties, and a portion of their conversion claims (the “Estopped Claims”), on the basis that they were barred by the defence of collateral estoppel under New York law.36 The remaining conversion claims were dismissed on separate grounds.37 As for costs, the Tribunal ordered the Investors to pay USD513,655.00 in costs to GOL, representing approximately 60% of GOL’s legal costs and disbursements (the “GOL Costs Order”).38 The Tribunal also made other orders, but they are not material to the present applications.39
Procedural history of these proceedings On 16 August 2021, the GOL Parties filed HC/OS 834/2021 (which was later converted to OS 6) seeking leave to enforce the Award,40 and on 2 September 2021, an
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