Macau-based Sanum wins appeal against Laos gov't in casino operation case

The local company formerly suffered the seizure of the Savan Vegas casino complex by the Laos Government due to an alleged retroactive assessment of over US$70 million in taxes and the casino complex had since been sold to local gaming and hospitality company Macau Legend for an estimated 16.8 per cent of the price attributed to it by the former project operator, Sanum previously announced.

The most recent decision overrules a decision by the Singapore High Court and allows for Macau to be included under a bilateral investment treaty (BIT) signed by Laos and China in 1993, notes the publication. The appeal from Sanum came with regard to its claims of capital investment benefit losses brought about by taxes deemed unfair that were levelled by the Laos Government.

Given that the MSAR only officially returned to China in 1999, the court ruled that the "moving treaty frontier" (MTF) rule applied to Macau despite the opposition’s attempts to convince the court with letters exchanged between Laotian and Chinese diplomats.

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Sanum started arbitration proceedings against the Laos Government in 2012 and an independent arbitration tribunal took the case to Singaporean authorities which subsequently ruled that the territory had jurisdiction over the dispute and that the treaty should apply

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The Laos Government appealed to Singapore’s High Court, notes the publication, producing two letters between the Laotian Ministry of Foreign Affairs and the Chinese Embassy in Laos, which Sanum’s legal team argued could not be relied upon given that they were generated after the dispute came about. The court ruled in favour of Sanum.

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Simply put, because a treaty is binding in respect of the entire territory of a State, the MTF Rule presumptively provides for the automatic extension of a treaty to a new territory as and when it becomes part of that State, wrote Chief Justice Sundaresh Menon

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"Sanum continues to strongly object to the GOL’s (Government of Laos) unsupported claim of an outstanding ‘tax liability’ arising during the time period in which we were actively involved in the management of the Savan Vegas project. An objective review of our Flat Tax Agreement and the audited financials proves that all valid taxes were paid in full by Sanum during its operation of the Savan Vegas property," Jody Jordahl, President of Sanum Investments Limited, previously told Business Daily.

The company launched three legal actions against the Laos Government earlier this year "in response to specific illegal actions by the Government of Laos and its agents," the group previously announced in a press release.