Appeal won against Laos government sets new standards for both SARs

Savan Vegas Hotel and Entertainment Complex

Sanum Investments, a Macau-based American company, recently appealed against the Laos government in a case judged by the Court of Appeal of Singapore, following arbitration proceedings at the Singapore International Arbitration Center (SIAC). The case resulted in a clarification of the terms concerning the international legal status of the region, specifically its relationship with international agreements signed by the central government of China.
The ruling of the court late last week is clear and states that all bilateral (and multilateral) investment treaties signed by China with other nations include Macau and Hong Kong.
International laws and treaties and specifically the Vienna Convention allowed the Macau-based company to win its appeal and receive compensation for losses caused by reportedly unfair treatment from the Laos government. The company sought justice on the basis of a bilateral investment treaty (BIT) signed by Laos and China back in 1993.
The decision of the Court of Appeal reverses a previous decision by the Singapore High Court. Laotian and Chinese diplomats issued letters attempting to convince the court that the treaty did not extend to Macau.
However the attempts were not successful as the court found the case was subject to the regular Moving Treaty Frontier (MTF) rule.
“Because a treaty is binding in respect of the entire territory of a State, the MTF Rule presumptively provides for the automatic extension of a treaty to a new territory as and when it becomes part of that State,” wrote Chief of Justice Sundaresh Menon in the judgment summary.
Aside from the case of Sanum, the ruling opens a kind of “Pandora’s box” in terms of the international legal status of not only Macau but also Hong Kong as both handover agreements mean that they are similar in this particular legal aspect.
The Court of Appeal ruling, and SIAC’s decision also highlight that both regions being subject to the Basic Law, they are, in fact, also subject to other international rules and the agreements previously signed by the sovereign nation, the PRC. The judges concluded that international rules prevail over the Basic Law(s).
As previously reported by the Times in May, Sanum Investments was seeking compensation from the Laos government with which the company had a joint venture that included gaming and hospitality facilities. The two parties have been in a dispute over this venture since 2012.
At the time, the topic made the news as it was reported that another Macau company (Macau Legend Development Limited) had entered into a USD42 million (approximately HKD326 million) project development agreement (PDA) with a company wholly owned by the Ministry of Finance of the Lao People’s Democratic Republic to purchase the Savan Vegas Hotel and Entertainment Complex, a full-service casino, hotel and resort located in Laos’ Savannakhet Province.