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Donaco increases damages claim, injunction granted

A Cambodian court has granted Donaco International an injunction which will protects its Star Vegas casino from early termination of its land-lease, according to a legal proceedings update filing from Donaco on Tuesday.

Earlier this year, Donaco launched legal proceedings against three Thai vendors of its Star Vegas Casino in Cambodia, who have been accused of running a competing VIP business in breach of their contract.

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

In an ASX filing, Donaco said that the lessor had threatened to terminate the lease on “contrived and spurious” grounds.

An injunction was then granted by the Banteay Meanchey Court of First Instance, to prevent the threatened termination.

“This complements the previous injunction granted in Donaco's favour, to prevent the vendors from engaging in illegal competition in the Poipet area, in breach of the sale agreements for the Star Vegas,” said Donaco in a statement.

Furthermore, Donaco announced that after receiving expert legal and financial advice, it has moved to increase the size of its damages claim against the vendors, from US$120 million to US$190 million.

The company will continue to prosecute its damages claim via arbitration proceedings in Singapore.

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