The failure of Las Vegas Sands Corp (LVS) and Asian American Entertainment Corporation (AAEC) to sign a formal agreement was a key factor in a Macau court last week ruling against the latter in its bid to claim up MOP$96.5 billion (US$12.1 billion) in compensation, it has been revealed.
The case relates to negotiations between the two parties in 2001 to conduct a joint bid for a Macau casino concession, which ultimately came to an end when LVS opted to partner with Galaxy Entertainment Group (GEG) instead. AAEC, headed by Taiwanese businessman Marshall Hao, had been seeking substantial compensation for alleged breach of contract.
According to details of the ruling made public on Thursday, Macau’s Court of First Instance found that, although a letter of intent was signed by LVS and AAEC on 18 October 2001, none of the formal agreements initially conceived by the parties were ever signed. Instead, the parties had, until the relationship ended, remained in a phase of negotiation and preparation for the conclusion of various definitive agreements, and as such the letter of intent was not viewed by the court as binding.
The court also found that, since efforts to conclude definitive agreements failed, the letter of intent expired on 15 January 2002.
Given that AAEC could not prove that LVS had been in contact with GEG prior to 15 January 2002, nor did AAEC demonstrate that it had itself created or delivered Galaxy’s proposal to LVS, the court concluded that LVS had not violated the binding clauses of the letter of intent or any other legally established duty, and therefore the AAEC’s claim for damages was dismissed.
In issuing its ruling, the court said AAEC had “acted with malice in distorting the facts and seriously overestimated the amount of compensation,” and had therefore acted in bad faith.
AAEC first launched legal action against Las Vegas Sands Inc, Venetian Casino Resorts LLC, and Venetian Venture Development LLC in Nevada in 2007 but the case was dismissed in 2010 on the plaintiff’s failure to prosecute the case and to retain counsel.
The company subsequently filed a suit with the Tribunal Judicial de Base in January 2019 against Venetian Macau Ltd, Las Vegas Sands Nevada, Las Vegas Sands LLC and Venetian Casino seeking MOP$3 billion (US$375 million) in damages, before dramatically increasing the claim to MOP$96.5 billion six months later. AAEC said at the time that its revised figure covered lost profits for the period from 2004 to 2018 while reserving its right to also claim for profits through to the expiration of the LVS concession in 2022.
That claim amounted to around 70% of LVS profits achieved through its Macau concession in that time.
In a filing earlier this week, LVS subsidiary Sands China noted that AAEC may apply for appeal against the judgment by 18 May 2022 but said it “will monitor the development of the relevant proceedings, and will continue to defend the matter vigorously.”
RelatedPosts
