Australia-listed casino operator Donaco International Ltd said on Thursday that a Cambodian court has issued an interim injunction to close the Star Paradise border casino, which operates near the firm’s Star Vegas Resort and Club in Poipet, Cambodia.
Donaco had said in November it was seeking an injunction via the Cambodia courts regarding alleged breaches of an agreement struck with a Thai former business partner.
In mid-September, Donaco stated it had issued a “cease and desist” letter to the former partner, that Donaco claimed was still operating the Star Paradise even after a deal for Donaco to run Star Paradise expired and was not renewed.
Donaco had begun operating Star Paradise in September 2016 with 40 tables, according to earlier filings. Star Paradise neighbours Donaco’s Star Vegas property, which the Australia-listed firm had acquired in July 2015 from the same Thai business partner, according to filings. Donaco claims that, according to the deal to acquire Star Vegas, the Star Paradise gaming venue could not operate without Donaco’s consent.
“The vendor has breached his agreements with Donaco, by conducting gaming operations at the Star Paradise property next door,” said the Asian casino operator in a Thursday filing to the Australian Securities Exchange. “This is in breach of the non-competition clauses agreed with Donaco at the time of the original sale and purchase of Star Vegas,” it added.
In its latest filing, Donaco said the Banteay Meanchey Court of First Instance had issued an interim injunction against the former partner, “a Thai businessman called Somboon Sukcharoenkraisri, who also has a Cambodian passport under the name of Lee Bug Leng”. According to the company, the injunction also binds Mr Somboon’s two sons, “who have also breached the agreements”.
“These three defendants also jointly own a Cambodian company called Lee Hoe Property Co Ltd, which owns land in Poipet. The injunction also binds Lee Hoe Property, since it is also subject to the non-competition clauses, and the Star Paradise business is located on its land,” said the company.
Donaco additionally said that it “has also discovered another illegal casino operating on land owned by Lee Hoe Property”. The firm said that that business – described in the filing as “Paramax” – “has casino tables concealed behind a supermarket operation”, a situation that has been “reported … to the relevant authorities”.
“The injunction requires both Star Paradise and Paramax to cease gaming operations and to close down,” said the Australian firm in the filing. “It also prohibits Somboon and all other defendants from conducting any other casino and gaming related activities in Poipet City,” it added.
According to the filing, the court’s order allows the defendants to defer the execution of the injunction, by depositing a guarantee of US$360 million. The injunction is also subject to appeal.
The casino firm said it would continue enforce its legal rights via arbitration proceedings in Singapore.
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