Bloomberry Resorts and Hotels Inc and Sureste Properties, Inc v. Global Gaming Philippines LLC and GGAM Netherlands B.V.

At a glance

Parties

Bloomberry Resorts and Hotels Inc and Sureste Properties, Inc (Philippines), plaintiffs and award debtors, v. Global Gaming Philippines LLC and GGAM Netherlands B.V. (together GGAM), defendants and award creditors

Case no.

[2020] SGHC 01 (Originating Summons No 1432 of 2017); [2020] SGHC 113 (Originating Summons Nos 1385 of 2019 and 1257 of 2019, Summons No 6218 of 2019). The database lists the case as [2019] SGCA 113; the judgment itself is numbered [2020] SGHC 113.

Court

High Court of the Republic of Singapore, Belinda Ang Saw Ean J

Underlying award(s)

Partial Award on liability of 20 September 2016 and Final Award on quantum of 27 September 2019. Both were made in a Singapore-seated arbitration under the UNCITRAL Arbitration Rules 2010.

Forum and rules

Set-aside and enforcement proceedings under the International Arbitration Act (Cap 143A) and the UNCITRAL Model Law

Treaty

None. The arbitration was based on the clause in clause 19 of the Management Services Agreement of 9 September 2011.

Sector

Casino and hotel management (Solaire Resort & Casino, Manila)

Outcome

Bloomberry's applications to set aside and to resist enforcement of both the Partial Award and the Final Award were dismissed with costs.

Amount

Final Award: USD 85.2 million for lost management fees; USD 391,224 for pre-termination fees and expenses; USD 14,998,052 in costs; interest; and PHP 10,169,871,978.24 as the value of the BRC shares under the "Constructive Remedy" (to be reduced by PHP 193,448,652 if the dividends were released). Court costs were awarded to GGAM.

The dispute

Bloomberry and Sureste own the Solaire Resort & Casino in Manila. On 9 September 2011 they engaged GGAM under a Management Services Agreement (MSA) to manage Solaire for ten years. GGAM also acquired shares in Bloomberry Resorts Corporation (BRC) under a related option. Bloomberry terminated the MSA on 12 September 2013, and GGAM began arbitration the same day. In the Partial Award the tribunal found the termination wrongful and rejected Bloomberry's case that GGAM had induced the MSA by causal fraud. In the Final Award it ordered damages, including a \"Constructive Remedy\" for Bloomberry's interference with GGAM's sale of the BRC shares. In the Singapore High Court, Bloomberry argued that later US enforcement documents against Las Vegas Sands (LVS) (the SEC Order and the DOJ Non-Prosecution Agreement, together the \"FCPA Findings\") showed that GGAM's principals, Mr Weidner and Mr Chiu, had committed fraud and concealed evidence. It also argued that the Constructive Remedy exceeded the tribunal's jurisdiction and was punitive, that natural justice had been breached, and that paying damages to GGAM Netherlands would give effect to tax evasion. GGAM answered that the challenges were out of time, without evidence of fraud, and attempts to reopen the tribunal's findings of fact.

Key holdings

1. The three-month time limit in Art 34(3) of the Model Law is absolute and cannot be extended, even for fraud discovered later. It also applies to set-aside applications under s 24 of the IAA. The application to set aside the Partial Award was filed about a year late and was dismissed with costs. [2020] SGHC 01, ¶¶ 41–46
2. Time to apply to set aside the order granting leave to enforce the Partial Award, and the Enforcement Judgment, was extended under O 3 r 4(1) of the Rules of Court. The court relied on the post-award DOJ Agreement and on the minimal prejudice to GGAM. Bloomberry paid the costs of the extension application. [2020] SGHC 01, ¶¶ 52–54
3. No procedural fraud. Mr Weidner's statement of 18 August 2012 was not made in a legal proceeding and was not shown to be dishonest. His evidence in the arbitration was not deceptive. Paul Hastings did not dishonestly conceal information or documents, and the complaints about document production had been raised, or could have been raised, before the tribunal. [2020] SGHC 01, ¶¶ 125–156
4. The FCPA Findings do not prove on a balance of probabilities that Mr Weidner or Mr Chiu bribed officials, at LVS or at Solaire. They are negotiated documents that concern violations of the FCPA's accounting provisions only, and no charges were brought against either man. They were not material: they lacked the necessary connection to the Partial Award, so enforcement was not refused on public policy grounds under Art 36(1)(b)(ii). [2020] SGHC 01, ¶¶ 166–185, 201, 219
5. Art 36(1)(a)(ii) (inability to present one's case) was not engaged. At most, Bloomberry was deprived of the chance to present a different case. The application to resist enforcement of the Partial Award was dismissed with costs. [2020] SGHC 01, ¶¶ 226–230
6. The Constructive Remedy was within the scope of the submission to arbitration. The share-interference claim fell within the broad arbitration clause in cl 19.1 of the MSA. The remedy binds only Bloomberry, not Prime Metroline Holdings Inc (PMHI), which is not a party to the MSA. Valuing the shares as of 9 December 2014 was compensatory, not punitive damages excluded by cl 19.2(c). Any error in the valuation date was at most an error of fact. [2020] SGHC 113, ¶¶ 43–48, 63–66
7. No breach of natural justice in the Final Award. The tribunal considered the FCPA Findings when assessing damages, and it rightly refused to reopen liability. The claims of improper procedure and of tax evasion through GGAM Netherlands failed because of the tribunal's binding finding that GGAM Netherlands was not a sham. Both applications against the Final Award were dismissed with costs. [2020] SGHC 113, ¶¶ 75–91

Procedural history

1. 9 September 2011Bloomberry and GGAM conclude the Management Services Agreement for Solaire.
2. 12 September 2013Bloomberry issues a notice of termination; GGAM commences the arbitration the same day.
3. 28 March 2014Tribunal constituted. On 9 December 2014 it issues an Interim Measures Order superseding the Makati Regional Trial Court's injunction over the shares.
4. 20 September 2016Partial Award on liability: Bloomberry's termination was wrongful. Leave to enforce is granted in Singapore on 27 September 2016.
5. 22 November 2017Tribunal declines Bloomberry's Request for Reconsideration (filed 31 August 2017), holding it has no power to reopen liability.
6. 21 December 2017Bloomberry files OS 1432 to set aside, or resist enforcement of, the Partial Award.
7. 27 September 2019Final Award on quantum, including the Constructive Remedy. Leave to enforce is granted on 10 October 2019 in OS 1257.
8. 3 January 2020High Court dismisses OS 1432 ([2020] SGHC 01). The later judgment notes that this decision was pending appeal.
9. 29 May 2020High Court dismisses OS 1385 and SUM 6218 against the Final Award ([2020] SGHC 113).

Tribunal, counsel and experts

Decided by

• Belinda Ang Saw Ean Judge, High Court of the Republic of Singapore

For the claimant

Drew & Napier LLC · Allen & Gledhill LLP · Paul Hastings LLP · Hughes Hubbard & Reed LLP

For the respondent

WongPartnership LLP

Experts

Peter Clark (respondent) · Philip Urofsky (claimant) · Thomas Mason (respondent) · Jorge Sarmiento (respondent) · Jose Vitug (respondent) · Reynato Puno (claimant)

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Keywords

• Solaire
• casino management
• set-aside
• enforcement
• Art 34(3) time limit
• s 24 International Arbitration Act
• procedural fraud
• public policy
• FCPA
• Las Vegas Sands
• non-prosecution agreement
• concealment of documents
• natural justice
• excess of jurisdiction
• punitive damages
• interim measures
• tax evasion
• Singapore-seated arbitration

Summary generated with AI from the published documents — refer to the award for the authoritative text.