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Donaco granted second injunction after Star Vegas land owner threatens lease termination

Tuesday, 12 June 2018 16:21
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Donaco International Limited has been granted a new injunction against the three vendors of its Star Vegas business in Poipet – who also own the land upon which the casino resort sits – after they threatened to terminate Donaco’s 50-year lease.

In an update on the company’s ongoing legal battle, Donaco revealed that the vendors, named as Lee Bug Leng, Lee Bug Huy and Lee Bug Tong, had “threatened to terminate the lease on contrived and spurious grounds” despite their company, Lee Hoe Property Co. Ltd, having previously signed a 50-year lease with Donaco for Star Vegas to occupy the land parcel.

“Accordingly, Donaco has now obtained an injunction in its favor from the Banteay Meanchey Court of First Instance to prevent the threatened termination,” Donaco said.

“This complements the previous injunction granted in Donaco’s favor to prevent the vendors from engaging in illegal competition in the Poipet area, in breach of the sale agreements for the Star Vegas. The vendors have indicated that they intend to appeal against that previous injunction, but the appeal process has not commenced yet.”

Donaco also revealed that it has increased the size of a damages claim against the vendors via arbitration proceedings in Singapore from US$120 million to US$190 million upon expert legal and financial advice. Those proceedings relate to the vendors continuing to run gaming operations in defiance of non-compete provisions at Star Paradise, which is located adjacent to Star Vegas in Poipet.

The trio 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.

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