Singapore’s Court of Appeal (CA) has junked an appeal filed by the group of tycoon Enrique Razon Jr. against the arbitral award favoring Las Vegas-based management firm Global Gaming Philippines LLC (GGAM), the ousted management firm of Solaire gaming resort.
As such, Solaire’s property developer, Bloomberry Resorts Corp., is now bracing for another court battle, this time at the local courts, to prevent the enforcement of the arbitral ruling.
In a disclosure to the Philippine Stock Exchange on Tuesday, Bloomberry said that its subsidiaries Sureste Properties Inc. (SPI) and Bloomberry Resorts and Hotels Inc. (BRHI) had received the judgment of the Singapore Court of Appeal dismissing their appeal against the decision of the Singapore High Court dated May 29, 2020.
The Singapore High Court had upheld a 2016 ruling issued by the Singaporean Arbitration Tribunal that the ouster of GGAM was “wrongful.” Likewise upheld was GGAM’s claim to an 8.7-percent stake in Bloomberry as part of the old management deal, equivalent to about 921.18 million shares that the firm could sell to the market.
Razon’s group, on the other hand, accused GGAM of committing fraud and misrepresentation leading to its ouster as management firm for Solaire in 2013.
“In the event that GGAM will file an action to enforce the arbitral award in the Philippines where the assets and business of BRHI and SPI are located, BRHI and SPI will oppose such enforcement based on applicable Philippine law,” Bloomberry said.
In the arbitration court’s final award in 2019, monetary awards were issued in favor of GGAM alongside a “constructive remedy” pertaining to the 921.18 million Bloomberry shares declared as owned by GGAM.
In the final award being contested by Bloomberry, a sum of $296 million was awarded to GGAM, broken down as follows:
– $85.2 million as damage for lost management fees to claimants;
– $391,224 as pre-termination fees and expense to claimants;
– P10.17 billion ($281.2 million) for the 921.18 million GGAM shares in Bloomberry in exchange for claimants turning over the shares after the payment; and,
$14.998 million reimbursement for cost of arbitration.
At its closing price of P5.87 per share on Tuesday, the block of shares awarded to GGAM was worth around P5.41 billion at the stock market.
In contesting the partial award given by the Singaporean courts to GGAM, Bloomberry’s subsidiaries invoked the U.S. Department of Justice’s issue with Las Vegas Sands (LVS) and the U.S. SEC order on the Foreign Corrupt Practices Act (FCPA) involving GGAM’s top executives while they were officials at Las Vegas Sands.
In 2016, Las Vegas Sands paid the US government $9 million in penalty to settle charges of violating FCPA by failing to properly authorize or document millions of dollars in payments to a consultant that facilitated business in China and Macau.
SPI and BRHI had characterized the FCPA findings as “new evidence” of GGAM’s alleged procedural fraud, arguing that this should be a legal ground for setting side the partial award issued by the arbitration court.