Arbitration court ruling favors ex-Solaire manager
A Singapore-based arbitration court has ruled that the Las Vegas-based Global Gaming Philippines LLC (GGAM) had been unjustly booted out of the management of Solaire Resorts & Casino. It also upheld GGAM’s claim to an 8.7-percent stake in resort owner and developer Bloomberry Resorts Corp.
In a disclosure to the Philippine Stock Exchange Thursday, Bloomberry said the Singaporean Arbitration Tribunal hearing the dispute between Bloomberry Resorts and Hotels Inc. (BRHI)/Sureste Properties Inc. (SPI) and GGAM issued a “partial award” on Sept. 20.
The court declared that GGAM had not misled respondents BRHI/SPI into signing the management services agreement (MSA) and that respondents were “not justified to terminate the MSA because the services rendered by the respondents’ management team should be considered services rendered by GGAM under the MSA.”
When tycoon Enrique Razon-led Bloomberry terminated the management contract with GGAM for Solaire in 2013, it claimed that the latter had breached their MSA. GGAM fought back by bringing the case to court for arbitration, claiming that Bloomberry was the one in violation of the MSA.
GGAM is a unit of a Las Vegas-based casino investor, developer and manager of casino properties that also operates in Macau and Singapore. Under the deal with Bloomberry, GGAM was to provide planning, technical and other advisory services to the Solaire Manila project during its construction and fit-out stage. GGAM was also supposed to provide management services to Solaire.
The tribunal rejected GGAM’s claim that it had been been defamed by the publicized statements of the BRHI/SPI chair. However, the court found no basis for Bloomberry to challenge GGAM’s title to some 921.184 million Bloomberry shares “because the grounds for termination were not substantial and fundamental, thus GGAM can exercise its rights in relation to those shares, including the right to sell them,” the disclosure showed.
These Bloomberry shares were part of the incentive package given to GGAM as manager of Solaire but because the arrangement had been terminated, Bloomberry challenged the group’s claim on the shares. GGAM had attempted to unload these shares in the past but the sale was disrupted by the legal dispute.
“BRHI and SPI were advised by the Philippine counsel that an award of the Arbitral Tribunal can only be enforced in the Philippines through an order of a Philippine court of proper jurisdiction after appropriate proceedings, taking into account applicable Philippine laws and public policies,” the Bloomberry disclosure said.
In the meantime, the tribunal reserved its decision on relief, remedies and costs. The remedies phase will be organized in consultation with the parties, according to the disclosure.
The Arbitral Tribunal also reserved for another order its resolution on the request of GGAM for the award to be made public and to be allowed to provide a copy of the award to Philippine courts, government agencies and persons involved in the sale of the shares, and to require respondents to inform Deutsche Bank AG that they have no objection to the immediate release of all dividends paid by Bloomberry to GGAM.
Shares of Bloomberry fell by 4.27 percent to close at P4.71 per share on Thursday, giving it a market capitalization of P54.13 billion.
