Donaco announces delays in arbitration case

Wednesday 14th of August 2019

Donaco International has announced a further delay in its legal battle to secure compensation from the former owners of its Cambodian resort, Star Vegas.

The Australia-listed company is involved in arbitration proceedings against the Thai vendors in a Singapore court.

In a filing to the Australian Stock Exchange, Donaco said an evidentiary hearing was heard over a two week period from July 29th, but was not completed. A further one-week hearing has now been set for Nov. 25.

Donaco noted that it was unable to provide further details on the delay as the court hearings are confidential.

It pointed out that the case is taking far longer than most arbitration cases in Singapore, which have a mean duration of 13 months and a median of 11.3 months. Donaco said it has now been 18 months since it first filed its claim. It has previously said it was seeking US$190 million in damages.

Donaco bought the Star Vegas property in 2015 for $360 million in a major expansion of its business, but soon discovered the Thai vendors were operating a casino in the near vicinity in violation of non-compete clauses.

In September 2017, the company issued a cease and desist order against the illegal operations and was granted an injunction by a Cambodian court.

It was granted a further injunction in June last year preventing the three Thais from terminating the lease on the land on which the Star Vegas is located.

The property occupies a long-term (50-year) lease, on land which is owned by the lessor, Lee Hoe Property Co., Ltd. This is a Cambodian company which is jointly owned by the vendors of the Star Vegas business.

Donaco has previoused named the defendants as Lee Bug Leng, who also has a Thai passport under the name of Somboon Sukcharoenkraisri; Lee Bug Huy, who also has a Thai passport under the name of Techatut Sukcharoenkraisri and Lee Bug Tong, whoses Thai name is Bhuvasith Chaiaru.