ST Group Co Ltd, Sithat Xaysoulivong and ST Vegas Co Ltd v. Sanum Investments Limited / Sanum Investments Limited v. ST Vegas Enterprise Ltd

At a glance

Parties

ST Group Co Ltd, Sithat Xaysoulivong and ST Vegas Co Ltd (appellants in CA 113) v. Sanum Investments Limited; Sanum Investments Limited (appellant in CA 114) v. ST Vegas Enterprise Ltd

Case no.

[2019] SGCA 65; Civil Appeals Nos 113 and 114 of 2018 (from Originating Summons No 890 of 2016)

Court

Court of Appeal of the Republic of Singapore

Judges

Sundaresh Menon CJ, Judith Prakash JA (delivering the judgment), Quentin Loh J

Underlying award(s)

Final Award dated 22 August 2016, SIAC Arbitration No 184 of 2015

Treaty

None. Contract arbitration clause: cl 2(10) of the Master Agreement of 30 May 2007; New York Convention Art V(1)(a); Model Law Art 36(1)(a); IAA s 31(2)

Sector

Gaming; slot machine clubs (Laos)

Outcome

CA 113 allowed and the order granting leave to enforce the Award set aside for all award debtors, because the arbitration was wrongly seated in Singapore instead of Macau; CA 114 dismissed.

Amount

The Award granted Sanum US$200m in damages for breach of contract, plus legal expenses, arbitration costs and interest. The Court ordered written submissions on the costs of the appeals.

The dispute

Sanum Investments Limited is a Macau gaming company. In 2007 it entered into a joint venture with Lao companies controlled by Mr Sithat Xaysoulivong, under a Master Agreement of 30 May 2007 and several sub-agreements. Sanum said the Lao Parties failed to hand over the Thanaleng Slot Club on the turnover date of 11 October 2011. Sanum then lost before the Lao OEDR and the Lao courts. It next started a SIAC arbitration, in which a three-member tribunal awarded it US$200m. The Lao Parties did not take part after objecting. When Sanum sought to enforce the Award in Singapore, they resisted under Art 36(1)(a) of the Model Law. Their grounds were: (i) not all of them were parties to the arbitration agreement; (ii) the dispute fell outside its scope; and (iii) the seat and the composition of the tribunal did not follow the parties' agreement. The High Court set aside the leave order against ST Vegas Enterprise but upheld it against the other three, and both sides appealed.

Key holdings

1. The dispute arose solely under the Master Agreement (the turnover obligation in cl 1(3)(d)), not under the Participation Agreement with ST Vegas Enterprise. The only relevant arbitration clause was therefore cl 2(10) of the Master Agreement. ¶¶ 50–53
2. ST Group, ST Vegas and Mr Sithat were parties to the Master Agreement; Mr Sithat had signed 'as an individual'. ST Vegas Enterprise was not a party: under Lao law a party must show voluntary consent, and it never signed. This disposed of CA 114. ¶¶ 56–61
3. The Court had asked whether a multi-tier clause allowing arbitration after Lao court proceedings is a valid arbitration agreement at all, but it declined to decide the point. The Lao Parties bore the burden of proving the clause invalid under Lao law, which governed it, and did not do so. The Court would not presume that Lao law is the same as Singapore law at so late a stage. ¶¶ 71–75
4. Properly read, cl 2(10) ('arbitrate such dispute, using an internationally recognized arbitration company, in Macau') made Macau the seat. Sanum's own counsel had repeatedly said so. The three-member tribunal was also wrongly constituted, because it rested on cl 19 of the Participation Agreement; absent that clause, the SIAC Rules default of a sole arbitrator applied. ¶¶ 81–89
5. No waiver or estoppel. Art 4 of the Model Law did not apply because the Lao Parties had not proceeded with the arbitration, and Rakna did not prevent their objections. ¶¶ 90–92
6. An award from a wrongly seated arbitration should not be recognised or enforced unless the wrong seat was waived. The party resisting enforcement need not show actual prejudice; it is enough that a different supervisory court would have been available. Leave to enforce against ST Group, Mr Sithat and ST Vegas was refused. ¶¶ 102–104
7. The Court left open whether a wrongly composed tribunal requires proof of prejudice, since the wrong seat already decided CA 113. ¶¶ 107–108

Procedural history

1. 30 May 2007The Master Agreement is executed, containing the dispute resolution clause cl 2(10).
2. 1 March 2012Sanum begins proceedings before the Lao OEDR, which dismisses the claim on 21 May 2012.
3. 4 April 2014The Lao People's Supreme Court affirms the Vientiane People's Court judgment in favour of ST Vegas.
4. 23 September 2015Sanum commences the SIAC arbitration against the Lao Parties, who object to it.
5. 20 January 2016The SIAC appoints all three members of the tribunal under rule 9.1 of the SIAC Rules 2013.
6. 22 August 2016Final Award: US$200m in damages, plus costs and interest, for Sanum.
7. 7 September 2016Sanum obtains leave to enforce the Award in Singapore.
8. High Court ([2018] SGHC 141) sets aside leave against ST Vegas Enterprise and upholds it against the other award debtors.
9. 18 November 2019Court of Appeal allows CA 113, sets aside the Leave Order and dismisses CA 114.

Tribunal, counsel and experts

Decided by

• Sundaresh Menon Judge, Court of Appeal of Singapore
• Judith Prakash Judge, Court of Appeal of Singapore
• Quentin Loh Judge, Court of Appeal of Singapore

For the claimant

WongPartnership LLP · Deitsch-Perez

For the respondent

Rajah & Tann Singapore LLP · Lee & Lee · Haridass Ho & Partners

Experts

Gerard Ngo (claimant)

Run a conflict check on these names →

Keywords

• enforcement
• New York Convention Article V(1)(a)
• Model Law Article 36(1)(a)(iv)
• seat of arbitration
• wrongly seated arbitration
• Macau
• SIAC
• prejudice
• composition of tribunal
• multi-tier dispute resolution clause
• non-signatory
• Laos
• gaming
• slot club
• Thanaleng Slot Club
• waiver
• International Arbitration Act s 31(2)
• Sanum

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