The Singapore Court of Appeal (CA) dismissed an appeal filed by magnate Enrique Razon Jr.’s group against the arbitration award in favor of Las Vegas-based management company Global Gaming Philippines LLC (GGAM), the ousted management of the Solaire play complex.
As such, Solaire’s real estate developer Bloomberry Resorts Corp. is now preparing for another legal battle, this time in local courts, to prevent the enforcement of the arbitration award.
In a disclosure to the Philippine Stock Exchange on Tuesday, Bloomberry said its subsidiaries Sureste Properties Inc. (SPI) and Bloomberry Resorts and Hotels Inc. (BRHI) had received the Singapore Court of Appeal ruling dismissing their appeal against the Singapore High Court ruling dated May 29, 2020.
The Singapore High Court upheld a 2016 ruling by the Singapore Arbitration Tribunal that GGAM’s ouster was “unjustified”. Likewise, GGAM’s claim of an 8.7% stake in Bloomberry under the old management agreement, equivalent to approximately 921.18 million shares that the company could sell on the market, was confirmed.
Razon’s group, on the other hand, accused GGAM of committing fraud and misrepresentation that led to its ouster as a management company of Solaire in 2013.
“In the event that GGAM files an action to enforce the arbitration award in the Philippines where the assets and operations of BRHI and SPI are located, BRHI and SPI will oppose such enforcement on the basis of applicable Philippine law,” said Bloomberry said.
In the final award of the arbitral tribunal in 2019, pecuniary indemnities were pronounced in favor of GGAM as well as a “constructive appeal” concerning the 921.18 million Bloomberry shares declared as belonging to GGAM.
In the final award contested by Bloomberry, $ 296 million was awarded to GGAM, broken down as follows:
– $ 85.2 million in damages for management fees lost to plaintiffs;
– $ 391,224 for fees and expenses prior to termination for applicants;
– 10.17 billion pesos (281.2 million dollars) for the 921.18 million GGAM shares of Bloomberry in exchange for the delivery of the shares by the applicants after payment; and,
$ 14.998 million in reimbursement of arbitration fees.
At its closing price of 5.87 pesos per share on Tuesday, the block of shares allocated to GGAM was worth around 5.41 billion pesos on the stock exchange.
In challenging the partial award granted by the Singaporean courts to GGAM, the Bloomberry subsidiaries cited the US Department of Justice’s problem with Las Vegas Sands (LVS) and the US SEC’s Foreign Corrupt Practices Act order ( FCPA) involving the top executives of GGAM while they were official at Las Vegas Sands.
In 2016, Las Vegas Sands paid the US government $ 9 million in fines to settle the FCPA violation charges by failing to authorize or properly document millions of dollars in payments to a consultant who facilitated business by China and Macau.
SPI and BRHI had called the FCPA’s findings “new evidence” of GGAM’s alleged procedural fraud, arguing that this should be a legal ground for overturning the partial award made by the arbitral tribunal.
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