An international arbitration tribunal in London has ordered provisional measures be imposed on the government of Laos during its dispute with Macau-based Sanum Investments.
The measures, announced in September, prevent the Lao Government from seizing Sanum’s resort hotel and casino in the city of Savannakhet, called Savan Vegas, and from “further interfering with the business operations of Lao Holdings”, which is the Netherlands-based holding company of Sanum.
This interim award comes as a relief, and we continue to have hope that the government will abide by its commitments, and the rule of law will be upheld in Laos
Jody Jordahl, president, Sanum Investments
The International Centre for Settlement of Investment Disputes tribunal also ruled against the Lao government’s planned implementation of a new 80 percent tax on gross casino revenue, which Jody Jordahl, Sanum’s president, said would have put Savan Vegas out of business.
“Losing Savan Vegas would have seriously harmed Sanum and Lao Holdings, and sent a terrible message to the international investment community,” Jordahl said in the statement.
“Had Laos’ new 80 percent tax been enforced, we would have had no choice but to close. This interim award comes as a relief, and we continue to have hope that the government will abide by its commitments, and the rule of law will be upheld in Laos”.
Sanum, as part of Lao Holdings, filed arbitration claims against the Lao government in August 2012, when control of the Thanaleng Slot Machine Club, located near the capital Vientiane, was seized by a Lao family group. Jordahl believes the move was done through the family's connections to the government. Thanaleng was 60 percent owned by Sanum.
After the casino was taken over, the Lao government ordered Sanum to pay a disputed $23 million tax bill and threatened to arrest senior executives and directors if the firm did not comply.
The recent provisional measures require disputed tax payments to be placed in escrow.
Laos, which became a member of the WTO in 2013, has obligations to abide by international investment treaties that protect foreign investors. The Sanum case is the government's first legal dispute with a foreign investor under those obligations.
Sanum Investments is a Macau-based real estate investment company with significant holdings and operations in Laos.