Southeast Asian casino operator Donaco International Limited has entered mediation talks with the Thai vendor of its Star Vegas property in Poipet, Cambodia, aimed at putting an end to ongoing legal battles in multiple jurisdictions.
The talks relate to three separate ongoing legal cases, including an arbitration claim in Singapore where Donaco is seeking US$190 million in damages; a Cambodian court battle over a disputed 50-year land lease deal for Star Vegas; and a freeze order in Australia placed on the sale of the Thai vendors’ 17.9% Donaco stake.
All three cases emanate from a previous business relationship between the parties that saw the Thai vendors originally granted permission to host gaming facilities in a neighboring property to Star Vegas. The agreement saw Donaco paid a monthly management fee of THB5 million (US$151,000), but the company opted not to renew when the agreement expired in 2017 and no new management arrangements were put in place.
When Donaco objected to the continuation of gaming operations by the vendors in defiance of non-compete provisions, they threatened to terminate Donaco’s Star Vegas land lease.
On Monday, three years after the long-running dispute began, Donaco revealed it has signed a memorandum of understanding with the Thai vendors under which all litigation matters between the two have been suspended for two months to allow the parties to conduct settlement negotiations.
“The suspension applies to the Singapore arbitration claim against the Thai vendor, the lease dispute in Cambodia, and all other litigation matters in Cambodia, Thailand and Australia,” it explained.
Donaco recently underwent a major overhaul of its board following an eventful Annual General Meeting that saw three directors ousted and CEO Paul Arbuckle subsequently announced his resignation.
