A Singapore-based arbitration court has sided with US-based Global Gaming Asset Management Philippines (GGAM) and said it did not mislead billionaire Enrique Razon Jr. into signing the management agreement to operate Solaire Resorts and Casino.
The court also said there is no basis for Razon, who owns Bloomberry Resorts Corp., to challenge the ownership of GGAM on some 921.18- million shares in the company. GGAM acquired the said shares after it exercised its equity option rights to raise its stake in Bloomberry to 8.7 percent.
“There is no basis for respondents [Bloomberry] to challenge GGAM’s title to the 921,184,056 [Bloomberry] shares, because the grounds for termination were not substantial and fundamental, thus GGAM can exercise its rights in relation to those shares, including the right to sell them,” the arbitration court said.
GGAM is the previous operator of Solaire after signing a five-year management contract.
In September 2009 Bloomberry entered into a management services agreement with GGAM for all the aspects of the operations of Solaire, which included the preopening preparations.
As part of the agreement, GGAM was granted the option to purchase up to 921.18-million shares at a purchase price equivalent to P1-per share plus $15 million.
Fees per contract amounts to $100,000 per month for the technical assistance and $75,000 monthly for services related to the preopening operations. Its contract was for five years, with the option to extend by another five years.
However, Razon fired GGAM in 2013 shortly after the opening of Solaire, accusing the Las Vegas-based firm of just sitting on their laurels and allowing the billionaire’s management to do most of the leg work, including bringing in VIP gamblers from Macau and China.
But the international tribunal rejected the claim of GGAM that it was defamed by the heated statements of Razon against the firm.
The tribunal still has to make a decision on the reliefs, remedies and cost, which it will organize in consultation with the parties.
Bloomberry said it was advised by Philippine counsel that “an award of the Arbitral Tribunal can only be enforced in the Philippines through an order of a Philippine court of proper jurisdiction after appropriate proceedings taking into account applicable Philippine law and public policy.”
The Arbitral Tribunal reserved for another order its resolution on the request of GGAM: (a) for the award to be made public; (b) to be allowed to provide a copy of the award to Philippine courts, government agencies and persons involved in the sale of the shares; and (c) to require (Bloomberry) to inform Deutsche Bank AG that they have no objection to the immediate release of all dividends paid by (Bloomberry) to GGAM.