Laos v Sanum: Applicability of PRC-Laos BIT to Macau & Investment Treaty Arbitration
In Government of the Lao People’s Democratic Republic v Sanum Investments Ltd, the High Court of Singapore addressed the applicability of the bilateral investment treaty (BIT) between the People’s Republic of China (PRC) and Laos to Macau. Sanum Investments Ltd, a company incorporated in Macau, commenced arbitration against Laos, alleging expropriation of its investments in the gaming and hospitality industry. Laos challenged the arbitral tribunal's jurisdiction, arguing that the BIT did not extend to Macau. The High Court, Edmund Leow JC presiding, allowed Laos' application, holding that the PRC-Laos BIT did not apply to Macau and therefore the arbitral tribunal lacked jurisdiction over Sanum's expropriation claims.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's application allowed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court of Singapore addressed whether the PRC-Laos BIT applied to Macau and interpreted the dispute resolution article in the treaty, ultimately ruling in favor of Laos.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Government of the Lao People’s Democratic Republic | Plaintiff | Government Agency | Application Allowed | Won | |
| SANUM INVESTMENTS LTD | Defendant | Corporation | Application Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Edmund Leow | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- Sanum, a Macau-incorporated company, invested in Laos' gaming and hospitality industry.
- Disputes arose between Sanum and a Laotian entity, leading to arbitration proceedings.
- Sanum claimed Laos expropriated its investments through unfair taxes.
- Laos challenged the arbitral tribunal's jurisdiction, arguing the PRC-Laos BIT didn't apply to Macau.
- The arbitral tribunal ruled the PRC-Laos BIT applied to Macau and it had jurisdiction.
- Laos sought review of the tribunal's jurisdictional ruling in the Singapore High Court.
- The PRC and Laos exchanged diplomatic letters stating the PRC-Laos BIT did not extend to Macau.
5. Formal Citations
- Government of the Lao People’s Democratic Republic v Sanum Investments Ltd, Originating Summons No 24 of 2014, [2015] SGHC 15
6. Timeline
| Date | Event |
|---|---|
| PRC and Portugal signed a joint declaration on the question of Macau. | |
| PRC and Laos signed the Bilateral Investment Treaty. | |
| PRC informed the United Nations Security-General of the status of Macau in relation to treaties deposited with the UNSG. | |
| PRC resumed its exercise of sovereignty over Macau. | |
| Sanum Investments Limited was incorporated under the laws of Macau. | |
| Sanum began investing in the gaming and hospitality industry of Laos. | |
| Sanum commenced arbitral proceedings against Laos. | |
| The Tribunal delivered its award on jurisdiction. | |
| Plaintiff filed Originating Summons No 24 of 2014. | |
| Plaintiff filed Summons No 884 of 2014 praying for the admission of two diplomatic letters. | |
| SUM 884/2014 heard and prayers granted. | |
| Judgment reserved. |
7. Legal Issues
- Applicability of Bilateral Investment Treaty
- Outcome: The court held that the PRC-Laos BIT did not apply to Macau.
- Category: Substantive
- Jurisdiction of Arbitral Tribunal
- Outcome: The court held that the arbitral tribunal lacked jurisdiction over the defendant's expropriation claims.
- Category: Jurisdictional
- Interpretation of Dispute Resolution Clause
- Outcome: The court interpreted the dispute resolution clause in the PRC-Laos BIT, specifically Art 8(3), regarding the scope of arbitrable disputes.
- Category: Substantive
8. Remedies Sought
- Monetary Compensation
- Arbitration
9. Cause of Actions
- Expropriation
10. Practice Areas
- Commercial Litigation
- Arbitration
11. Industries
- Gaming
- Hospitality
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lee Hsien Loong v Review Publishing Co Ltd and another and another suit | Singapore High Court | Yes | [2007] 2 SLR(R) 453 | Singapore | Cited regarding the justiciability of international law questions bearing on domestic law. |
| Republic of Ecuador v Occidental Exploration and Production Co | English Court of Appeal | Yes | [2006] 2 WLR 70 | England | Cited for the principle that a court has jurisdiction to interpret an international instrument to determine rights and duties under domestic law. |
| PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal | Court of Appeal | Yes | [2014] 1 SLR 372 | Singapore | Cited for the de novo standard of review under s 10 of the International Arbitration Act and Art 16(3) of the Model Law. |
| Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) | Court of Appeal | Yes | [2004] 2 SLR(R) 392 | Singapore | Cited regarding the application of the Ladd v Marshall principles for admitting fresh evidence. |
| Tza Yap Shum v Republic of Peru | ICSID | Yes | Case No ARB/07/06, Decision on Jurisdiction and Competence (ICSID 19 June 2009) | International | Cited for its interpretation of similar language in a BIT regarding disputes involving the amount of compensation for expropriation, but the court disagreed with its reasoning. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 57 r 13 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Bilateral Investment Treaty
- PRC-Laos BIT
- Macau
- Expropriation
- Arbitration
- Jurisdiction
- Moving treaty frontiers rule
- Vienna Convention on the Law of Treaties
- International Arbitration Act
- Investor-state arbitration
15.2 Keywords
- Bilateral Investment Treaty
- Macau
- Laos
- Singapore High Court
- Arbitration
- Jurisdiction
- Treaty Interpretation
17. Areas of Law
16. Subjects
- International Law
- Arbitration Law
- Investment Law
- Treaty Law