The vendors of Donaco International Limited’s Cambodian resort, Star Vegas, in Poipet have commenced arbitration proceedings relating to a series of disputes between the feuding parties.
Donaco was last month granted an injunction against the vendors – who own the land upon which Star Vegas sits – after they threatened to terminate Donaco’s 50-year lease. It follows an earlier injunction granted in Donaco’s favor preventing the vendors from continuing to run gaming operations in defiance of non-compete provisions at Star Paradise, located adjacent to Star Vegas in Poipet.
The vendors, Lee Bug Leng, Lee Bug Huy and Lee Bug Tong, had previously been granted permission to host gaming facilities under the management of Donaco in a deal that saw the latter paid a monthly management fee of THB5 million (US$151,000), but that agreement expired in 2017 with no new management arrangements put in place. Donaco was also granted an injunction in April by the Supreme Court of New South Wales to freeze shares in the company held by the vendors, equal to 17.9% in the company’s issued share capital.
In a Friday 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.”
The injunction granted to Donaco in June by the Banteay Meanchey Court of First Instance in Cambodia remains in force for an indefinite period of time unless it can be overturned by another court or arbitration ruling, Donaco added.
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