The Court of Appeals in the Philippines has sided with Japanese businessman Kazuo Okada in a case against Philippine developer Century Properties Group Inc regarding a casino resort project in the country’s capital Manila.
“The company was notified by its legal counsel… of a court order issued by the Court Of Appeals dated March 27, 2015 granting Okada’s petition for review” of an injunction requested by Century Properties, the latter told the Philippine Stock Exchange on Thursday.
The dispute is important because under the country’s constitution and public land laws, only Filipinos, or entities owned at least 60 percent by Filipino citizens, are allowed to own land, thus restricting Mr Okada or his majority-owned companies to just 40 percent ownership of the land where the under-construction casino resort sits. A key issue was under what terms Philippine majority-owned Century Properties might fulfil the “local partner” role.
The latest court decision set aside an earlier ruling dated July 2014 by a regional court stopping a group of companies controlled by Mr Okada from terminating a deal with Century Properties to develop jointly the US$2-billion Manila Bay Resorts (pictured in a rendering), a major casino and real estate project.
The local casino regulator, the Philippine Amusement and Gaming Corp (Pagcor), originally wanted the first phase of the property open by the end of the first quarter of this year. A local media report in March said Mr Okada would be allowed to “complete” the resort by the first quarter of 2017.
Century Properties said in its Thursday filing that its management was “now studying the legal options” at its disposal regarding the latest court order.
The Philippine developer added the Court of Appeals order comes after the company on April 17 filed a notice of arbitration before the Hong Kong International Arbitration Centre in order to settle the dispute.
Century Properties has previously said it was open to settling its dispute with Mr Okada out of court.
In the July 2014 ruling, a regional court had “ordered the issuance of an injunction prohibiting the Okada group from giving effect to the termination of the agreements” with Century Properties, the company told the Philippine Stock Exchange at the time.
The injunction also prohibited Mr Okada’s group from striking a deal with any other local partners.
The original deal with Century Properties, signed in October 2013, would have made it 36-percent owner of Eagle I Landholdings Inc, the Okada-controlled company that holds the 44-hectare (109 acres) site where the casino resort will rise. The Philippine developer was set to build luxury residential and retail properties in a 5-hectare site within the complex.
The deal collapsed in March 2014 after First Paramount Holdings 888 Inc, the second local participant in the agreement, backed out of the deal to acquire 24 percent of Eagle I. The two local entities combined would otherwise have controlled 60 percent of Eagle 1, satisfying the local rules.
Mr Okada’s group holds one of four licences handed out by Pagcor for casino resort projects in an area known as Entertainment City.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia