Major arbitration in Macau-seated Tribunal awards $175 million to local gaming firm

ST Casino, where Thanaleng Slot Club is located, in Vientiane

In a landmark decision that has rippled through the international arbitration community, a Macau-seated Tribunal has awarded a significant victory to a local company in its dispute against a Laotian gambling and banking group. The “Final Award,” an extensive document of 284 pages reviewed by Macau Daily Times, awards a compensation of around USD175 million to the claimant, local-based firm Sanum Investments Ltd, over a commercial dispute in Laos.

The case, which pitted Sanum against a Laos-based gambling group that developed Savan Vegas, centered on allegations of contractual breaches and disputes over the terms of engagement between the two parties. A tribunal appointed by the International Chamber of Commerce (ICC), with an office in Macau, not only awarded the local company monetary compensation but also marked a significant moment in the application of Macau’s revised arbitration law of 2019, under which this case was decided.

This award is particularly noteworthy as it is the first major arbitration case seated in the Macau Special Administrative Region since the revision of its arbitration law in 2019. The revised law, aimed at modernizing and enhancing the arbitration framework in Macau, has evidently provided a robust basis for resolving this high-stakes dispute, highlighting the region’s capabilities in handling complex international arbitration cases.

The significance of this case extends beyond the monetary award. It represents a crucial test of Macau’s revised legal framework for arbitration. The law emphasizes principles such as the autonomy of the arbitration process, equality, confidentiality, and, notably, the minimal intervention of state courts, which aligns with international best practices in arbitration.

One of the key aspects of this case was the tribunal’s adherence to the principle of minimal court intervention, a “cornerstone of arbitration-friendly jurisdictions.” This principle, underscored in both Macau’s arbitration law and international conventions such as the 1958 New York Convention, to which Macau is a signatory, ensures that arbitration proceedings are not unduly influenced or hindered by external judicial processes. This approach not only expedites the resolution of disputes but also maintains the integrity and autonomy of the arbitration process, as stated in academic literature and legislation reviewed by the Times.

The process is currently in the “recognition of the award” stage by Laotian judicial authorities, a final and procedural step that paves the way for immediate enforcement. This legitimizes the decision in Laos and exemplifies the cross-border enforceability of arbitration awards, a critical factor for international businesses seeking reliable dispute resolution mechanisms.

This landmark case also highlights the finality of arbitration tribunal awards. As per the legislation, in an arbitration tribunal decision such as this one, there is no avenue for appeal. The respondents or their legal representatives can only challenge the decision “on procedural grounds.” This aspect of arbitration is vital for businesses that seek certainty and wish to avoid protracted legal battles.

The recognition of the award by Laotian judicial authorities is a critical step that “underscores the international legal community’s respect for arbitration decisions,” a note distributed by Sanum Ltd said. This act of recognition facilitates the practical implementation of the award but also strengthens the international arbitration framework by ensuring that awards are respected and enforced across borders. It highlights the importance of international cooperation and respect for the rule of law in the global arbitration landscape.

Macau’s successful handling of this type of case without any annulment being upheld against the arbitral award may reinforce its status as “an arbitration-friendly jurisdiction,” thereby enhancing its attractiveness as a seat for international arbitration, which is an important goal of the SAR government.

Recently, in a meeting with Vong Hin Fai, president of the Macau Lawyers Association, the Chief Executive Ho Iat Seng remarked that “arbitration and mediation are effective extra-judicial means of dispute resolution.” He added that in the future, Macau will be able to provide legal arbitration services catering to the Greater Bay Area (GBA) and international trades, making particular mention of China-Lusophone trades, as reported by the Times.

Lawyers and judges

Sanum Investments Ltd, a Macau company with American ownership, was represented by a team comprising both U.S. and Macau-based legal experts. From the United States, the team included Deborah Deitsch-Perez and Jeffrey T. Prudhomme of STINSON LLP and Jorge Menezes from FC Law – Lawyers & Private Notaries in Macau.

Jorge Menezes

On the opposing side, the respondents – ST GROUP CO. LTD, ST VEGAS CO. LTD, and Sithat Xaysoulivong, were represented by a legal team spanning multiple jurisdictions. Singaporean legal expertise was provided by Francis Xavier, Edwin Tan, Kristin Ng, Alvin Tay, and Alina Chia of RAJAH & TANN SINGAPORE LLP, along with Thomas Tan from Haridass Ho & Partners. Adding to this international team was Somphone Lakanchanh from SPL LAW OFFICE CO. LTD in Laos, ensuring that the respondents had legal advice that was well-versed in both Singaporean and Laotian legal principles. Within Macau, Jorge Neto Valente and Erica Medeiros from JNV – LAWYERS & NOTARIES, along with Andre Santos Raquel, contributed their local legal expertise to the respondent’s defense.

Neto Valente

This extensive and diverse legal representation underscores the complexity and international scope of the dispute, reflecting the increasing globalization of legal practice, especially in the realm of arbitration. The case also highlights the strategic importance of assembling a legal team that combines both deep local knowledge and broad international expertise, capable of navigating the intricacies of international arbitration law, as well as the specific legal landscapes of the jurisdictions involved.

The involvement of such high-caliber legal teams from multiple jurisdictions exemplified the high stakes of the arbitration and also demonstrated the “legal acumen and strategic planning required to litigate effectively in the global arena.” This arbitration case serves as a significant reference point for future disputes involving international investments and contractual agreements, particularly in the gaming industry.

The arbitration panel that delivered the unanimous decision on the merits in favor of Sanum Investments Ltd against the Lao-based ST Group and its affiliates comprised a trio of internationally renowned arbitrators. Their collective expertise, drawn from diverse legal traditions and jurisdictions, underscores the arbitration’s rigorous and fair adjudication process.

Robert H. Smit, serving as a co-arbitrator, is based in New York, USA. His extensive experience in international arbitration, coupled with his academic contributions to the field, positions him as a leading figure in international legal circles. His role in this arbitration underscores the panel’s commitment to incorporating a broad, international perspective.

V.K. Rajah SC, another co-arbitrator, hails from Singapore. His distinguished career includes service as the Attorney-General of Singapore, and his contributions to legal scholarship and practice in Singapore and internationally are well recognized. His involvement in the tribunal added a depth of understanding about Asian legal systems and international commercial law, enriching the panel’s deliberations.

Vera van Houtte, the President of the Tribunal, is based in Leuven, Belgium. Her global reputation as an arbitrator in international disputes, especially in commercial and investment arbitration, brought a wealth of experience and a balanced approach to the tribunal. Her leadership ensured the arbitration process was conducted to the highest standards of fairness and impartiality. PC