SCA refuses award enforcement in gaming dispute

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Lao-based ST Group won a case against Macau’s Sanum Investments’ attempt to enforce a US$200 million arbitral award after the Singapore Court of Appeal (SCA) refused to enforce the award because the seat of arbitration was incorrectly decided to be in Singapore.

The judgment came in the long-running dispute between Sanum Investments of Macau and the ST Group over agreements to invest in the gaming industry in Laos.

In the judgment, the SCA held that the tribunal’s decision to seat the arbitration in Singapore instead of Macau as agreed in the master agreement between the parties was wrong, and, “any award that ensues should not be recognized and enforced by other jurisdictions” because it was “not the result of the arbitration that the parties had bargained for”.

Consequently, Sanum’s attempts at enforcement of the award in Singapore were dismissed, and the judgment is likely to have an impact on enforcement proceedings in Australia and the US.

The dispute arose from a master agreement that was entered into in May 2007, and concerned an alleged breach by ST Group to turn over a slot club located in Thanaleng by a particular date. The master agreement contained a multi-tier dispute resolution clause providing for arbitration before the Office of Economic Dispute Resolution (OEDR), a Laos arbitral body, or litigation before the Laos courts. If a party was dissatisfied with the decision by the OEDR or Laos courts, they had the right to commence arbitration before an internationally recognized mediation/arbitration company in Macau.

In September 2015, Sanum, being dissatisfied with the decision of the Laos Supreme Court on the Thanaleng slot club dispute, initiated arbitration in the Singapore International Arbitration Centre (SIAC) against STG, Sithat Xaysoulivong, and the company’s two subsidiaries, ST Vegas Co and ST Vegas Enterprise (collectively, Laos parties). The Laos parties objected to the commencement of the SIAC arbitration and did not participate in the SIAC arbitration.

The SIAC tribunal decided that the seat of the arbitration was Singapore, and awarded Sanum a sum of US$200 million plus interest and costs. Sanum took steps to enforce the award in various jurisdictions, including Singapore, Australia and the US. The Laos parties challenged the enforcement in these countries. The Singapore High Court order denied the leave to enforce the award against ST Vegas Enterprise, but allowed Sanum to enforce the award against the remaining Laos parties.

Following the judgment, STG, Sithat and ST Vegas had appealed against the decision, while Sanum cross-appealed the refusal of enforcement of the award as against ST Vegas Enterprise.

The Laos parties were represented by Francis Xavier SC, Tee Su Mien and Edwin Tan of Rajah & Tann Singapore, and Thomas Tan of Haridass Ho & Partners.