Vendors threatened to terminate 50-year lease
The vendors of Donaco International Ltd.’s Star Vegas casino resort in Poipet, Cambodia have begun arbitration proceedings in the ongoing battle between the companies.
An injunction granted in June by the Banteay Meanchey Court of First Instance prevents the vendors of Star Vegas from terminating Donaco’s 50-year lease of the land where Star Vegas is located. An earlier injunction barred the vendors from continuing to run gaming operations in defiance of non-compete provisions at Star Paradise, located next to Star Vegas.
In the latest filing to the Australian Securities Exchange, Donaco revealed that the vendors had now commenced arbitration proceedings in Cambodia over Donaco’s land lease.
“The vendors have committed a number of breaches of the lease agreement, specifically by encroaching on the land leased to Donaco. In return the vendors have alleged that Donaco has committed various breaches of the lease,” the company said.
“Donaco is confident of its position in the arbitration proceedings, especially given the judgment already made in its favor by the Cambodian court.”
Each of the three shareholders—Somboon Sukcharoenkraisri, Techatut Sukcharoenkraisri and Bhuvasith Chaiarunrojh—own about 148 million shares in the company, or approximately 17.9 percent of the issued capital, according to GGRAsia. In 2015, they sold the Star Vegas to Donaco for US$360 million. In September 2017, Donaco issued a cease-and-desist letter to the Thai vendors, claiming they were still operating the nearby Star Paradise.
Last December, a Cambodian court ordered that Star Paradise be closed. According to a Donaco filing, the court then gave the vendors the option of deferring execution of the injunction by depositing a guarantee of US$360 million.
Donaco said its landlord threatened to end the lease on “contrived and spurious grounds.” Donaco previously said it is claiming US$190 million in damages from the three shareholders in the case it has brought before arbitrators in Singapore.
