An international tribunal in Singapore has ruled that units of Philippines-based casino firm Bloomberry Resorts Corp were “not justified” in terminating a casino management services contract with veteran industry figure Bill Weidner and his associates, according to a Thursday filing to the Philippine Stock Exchange.
The September 20 ruling of the Singapore-based Arbitral Tribunal – cited by Bloomberry’s filing – stated that a unit of Mr Weidner’s Global Gaming Asset Management (GGAM) did “not mislead [the Bloomberry side] into signing the management services agreement, and respondents were not justified to terminate the management services agreement…”
Bloomberry owns and operates the Solaire Resort and Casino in Manila, via its units Bloomberry Resorts and Hotels Inc and Sureste Properties Inc. The tribunal additionally said there was “no basis” for the Bloomberry units to challenge the right of GGAM unit Global Gaming Philippines LLC to control 921,184,056 shares of their parent company, the Bloomberry group.
But the tribunal also rejected GGAM’s claim that it had been defamed by publicised statements of the Bloomberry group’s chairman Enrique Razon.
Mr Razon had been quoted in the Wall Street Journal newspaper on September 13, 2013 – and in other contemporary news reports – as saying GGAM “turned out to be a very expensive, glorified executive-search firm”.
The casino management services contract related to the Solaire Resort and Casino, which opened in March 2013. Mr Weidner – a former president and chief operating officer of U.S.-based casino group Las Vegas Sands Corp – had been hired, along with his company GGAM, in September 2011, prior to the property’s construction.
According to the Bloomberry group’s 2015 annual report, filed on April 15 this year, GGAM unit Global Gaming Philippines had been paid an aggregate of US$175,000 per month for technical assistance on all aspects of planning, design, layout and construction of the project, as well as for services related to recruitment, selection and hiring of employees for Solaire.
Also according to the Bloomberry group’s 2015 annual report, on September 12, 2013, Bloomberry Resorts and Hotels and Sureste Properties terminated the agreement with GGAM, alleging “material breach” and “failure of discussions” aimed at settling dispute. The Bloomberry group said that as a result, its commitment regarding fees due to GGAM only ran up to that date.
The annual report also explained that GGAM came to own Bloomberry group shares – representing as of the annual report date 8.35 percent of the casino developer – as the result of exercising a purchase option on December 21, 2012.
But on February 25, 2014, the Makati Regional Trial Court in the Philippines granted the Bloomberry side a preliminary injunction, restraining GGAM from disposing of its Bloomberry group shares, said the Philippines-based group’s annual report. Then on December 9, 2014, the tribunal in Singapore ruled GGAM could sell the Bloomberry shares, but denied GGAM’s request it be declared full legal and beneficial owner of them.
The latest ruling of the Arbitral Tribunal – quoted in Bloomberry’s Thursday filing – said that “because the grounds for termination [of the management agreement] were not substantial and fundamental, thus GGAM can exercise its rights in relation to those shares, including the right to sell them”.
The tribunal – which the Bloomberry group’s 2015 annual report said was a three-member body operating under the arbitration rules of the United Nations Commission on International Trade Law, and using Philippine law as the governing law – made what was termed in Bloomberry’s latest filing as a “partial award on liability” against the Philippine group.
But the panel reserved for a later date a decision regarding a request from GGAM that: the terms of the award be made public; that GGAM be allowed to provide a copy of the award to the relevant Philippine authorities; and that Bloomberry and its units be required to inform Deutsche Bank AG that they have no objection to the immediate release of all dividends paid by Bloomberry relating to GGAM’s Bloomberry group shares.
The Bloomberry group said in its Thursday filing that it had received legal advice that the tribunal’s award could only be enforced after an order by a Philippines court.
“Bloomberry Resorts and Hotels and Sureste Properties were advised by 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 law and public policy,” said the group.
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Macau’s Secretary for Economy and Finance