An ongoing dispute between Australia-listed Donaco International and former Thai partners involved in the Star Vegas casino in Cambodia is finally making some real headway. Mired in legal headaches for the past five years, Donaco is reportedly sitting down at the negotiating table with the Thai group in order to find an equitable resolution. It’s good news for Donaco, which is hoping the closure of the battle will help it bounce back from a poor performance in the last quarter of 2019.
Donaco had purchased the casino from the Thai group in 2015, turning around to hire it to manage the gaming operations for two years. When the group decided to build a gambling facility next door, Star Paradise, an agreement was reached to have Donaco manage that venue’s gaming operations in what would essentially amount to a quid pro quo arrangement. However, Donaco was pushed out after the deal expired, which resulted in the partners being accused of violating a non-compete agreement. From there, the long legal battle ensued.
The negotiations center on that drama, as well as other cases. Donaco has been trying to seek legal authority to be paid $190 million in damages related to the Star Vegas dispute, due to the violation of the non-compete agreement, as well as a freeze order that was put in place when the Thai group wanted to dump its 17.9% stake in Donaco. The latter was implemented as a direct result of the ongoing case in Singapore, and the sale would not be authorized until the case was resolved.
A Cambodian court, in 2018, already determined that the Thai partners could not terminate the existing lease agreement with Donaco, but that didn’t bring any closure to the battle. Donaco provided an update to the Australian Securities Exchange yesterday, indicating that it has reached an agreement, through a memorandum of understanding, that will bring to a halt all legal battles for two months while they try to work out a proper settlement. The company explained, “The suspension applies to the Singapore arbitration claim against the Thai vendor, the lease dispute in Cambodia, and all other litigation matters in Cambodia, Thailand and Australia.”
This doesn’t necessarily mean that a resolution will be found – the two sides have tried to come to an amicable agreement before. However, it at least shows that they’re all willing to try to work out their differences, which should help Donaco rebound.
