Sanum Investments v. Government of Lao: Treaty Interpretation & Arbitration Jurisdiction
In [2016] SGCA 57, the Singapore Court of Appeal heard the case of Sanum Investments Limited v. The Government of the Lao People’s Democratic Republic, concerning the jurisdiction of an arbitral tribunal to hear expropriation claims. Sanum, a Macanese investor, initiated arbitration against the Lao Government under the PRC-Laos BIT. The Lao Government challenged the tribunal's jurisdiction, arguing the BIT didn't apply to Macau and the claim's subject matter was outside the BIT's scope. The High Court initially sided with the Lao Government, but the Court of Appeal reversed this decision, finding that the PRC-Laos BIT did apply to Macau and that the tribunal had jurisdiction to hear Sanum's claims.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Sanum Investments' expropriation claim against the Lao government hinged on the PRC-Laos BIT's applicability to Macau. The court determined the BIT applied, granting jurisdiction.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| SANUM INVESTMENTS LIMITED | Appellant, Defendant | Corporation | Appeal allowed in CA 139/2015 and CA 167/2015 | Won | Alvin Yeo, Koh Swee Yen, Monica Chong Wan Yee, Mak Shin Yi |
| THE GOVERNMENT OF THE LAO PEOPLE’S DEMOCRATIC REPUBLIC | Respondent, Applicant, Plaintiff | Government Agency | Appeal dismissed | Lost | Cavinder Bull, Lim Gerui, Darryl Ho Ping, Eunice Chan Swee En |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| Chao Hick Tin | Judge of Appeal | No |
| Andrew Phang Boon Leong | Judge of Appeal | No |
| Judith Prakash | Judge of Appeal | No |
| Quentin Loh | Judge | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Alvin Yeo | WongPartnership LLP |
| Koh Swee Yen | WongPartnership LLP |
| Monica Chong Wan Yee | WongPartnership LLP |
| Mak Shin Yi | WongPartnership LLP |
| Cavinder Bull | Drew & Napier LLC |
| Lim Gerui | Drew & Napier LLC |
| Darryl Ho Ping | Drew & Napier LLC |
| Eunice Chan Swee En | Drew & Napier LLC |
4. Facts
- Sanum, a Macanese investor, invested in the gaming and hospitality industry in Laos through a joint venture.
- Disputes arose between Sanum and the Lao Government regarding Sanum's investments.
- Sanum commenced arbitral proceedings against the Lao Government, alleging unfair and discriminatory taxes.
- The Lao Government challenged the Tribunal’s jurisdiction, arguing the PRC-Laos BIT did not extend to Macau.
- The Tribunal ruled it had jurisdiction, finding the PRC-Laos BIT applied to Macau and the claim fell within Art 8(3).
- The Lao Government sought to introduce Notes Verbales as evidence that the PRC-Laos BIT did not apply to Macau.
- The High Court initially sided with the Lao Government, finding the Tribunal lacked jurisdiction.
5. Formal Citations
- Sanum Investments Ltd v Government of the Lao People’s Democratic Republic, , [2016] SGCA 57
6. Timeline
| Date | Event |
|---|---|
| PRC and Portugal signed a joint declaration on the question of Macau. | |
| PRC-Laos BIT was signed. | |
| PRC-Laos BIT entered into force. | |
| PRC resumed sovereignty over Macau. | |
| Sanum began investing in the gaming and hospitality industry in Laos. | |
| Sanum commenced arbitral proceedings against the Lao Government. | |
| Counsel for the Lao Government informed the Tribunal that the Lao Government was reaching out to the PRC through diplomatic channels. | |
| Singapore was designated as the place of arbitration. | |
| Tribunal held that the PRC-Laos BIT did apply to Macau and that it has jurisdiction to hear the claim. | |
| Lao Government commenced Originating Summons No 24 of 2014. | |
| Laotian Ministry of Foreign Affairs sent a Note Verbale to the PRC Embassy in Vientiane, Laos. | |
| PRC Embassy replied with a Note Verbale. | |
| Lao Government filed Summons No 884 of 2014. | |
| Sanum appealed against the Judgment in Civil Appeal No 139 of 2015. | |
| Leave to appeal to the Court of Appeal had been granted. | |
| Judge applied the principle that costs follow the event, and granted costs of the Arbitration and of SUM 884/2014 to the Lao Government. | |
| Sanum appealed against the Costs Order in Civil Appeal No 167 of 2015. | |
| Lao MFA sent a Note Verbale to the PRC Embassy in Vientiane, Laos. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Jurisdiction of Arbitral Tribunal
- Outcome: The Court of Appeal held that the Tribunal did have jurisdiction to hear the claims.
- Category: Jurisdictional
- Sub-Issues:
- Territorial application of treaty
- Subject-matter jurisdiction
- Interpretation of Bilateral Investment Treaty
- Outcome: The Court of Appeal held that the PRC-Laos BIT did apply to Macau and adopted a broad interpretation of Article 8(3).
- Category: Substantive
- Sub-Issues:
- Application of PRC-Laos BIT to Macau
- Interpretation of Article 8(3) of PRC-Laos BIT
- Admissibility of Evidence
- Outcome: The Court of Appeal admitted the 2015 NVs into evidence but ultimately did not rely on them in its decision.
- Category: Procedural
- Sub-Issues:
- Admissibility of post-critical date evidence
- Application of Ladd v Marshall test
8. Remedies Sought
- Compensation for Expropriation
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 |
|---|---|---|---|---|---|
| Government of the Lao People’s Democratic Republic v Sanum Investments Ltd | High Court | Yes | [2015] 2 SLR 322 | Singapore | The High Court's decision that the Tribunal did not have jurisdiction to arbitrate the expropriation claims between Sanum and the Lao Government was appealed against. |
| Ladd v Marshall | N/A | Yes | [1954] 1 WLR 1489 | N/A | Cited for the conditions to admit further evidence before the Court of Appeal. |
| Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) | Court of Appeal | Yes | [2004] 2 SLR(R) 392 | Singapore | Cited for the modified version of the test in Ladd v Marshall. |
| Chan Ah Beng v Liang and Sons Holdings (S) Pte Ltd and another application | N/A | Yes | [2012] 3 SLR 1088 | N/A | Cited for the conditions laid down in Ladd v Marshall. |
| Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd and another | N/A | Yes | [2006] 4 SLR(R) 807 | N/A | Cited regarding the court's inclination to allow new evidence to be admitted when it originates from a non-party under no legal obligation to provide it. |
| PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal | N/A | Yes | [2014] 1 SLR 372 | N/A | Cited for the view that a review on jurisdiction should be undertaken de novo. |
| Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan | N/A | Yes | [2011] 1 AC 763 | N/A | Cited for the principle that the tribunal’s own view of its jurisdiction has no legal or evidential value before a court that has to determine that question. |
| PT Tugu Pratama Indonesia v Magma Nusantrara Ltd | N/A | Yes | [2003] 4 SLR(R) 257 | N/A | Cited for the principle that the court makes an independent determination on the issue of jurisdiction and is not constrained in any way by the findings or the reasoning of the tribunal. |
| AQZ v ARA | N/A | Yes | [2015] 2 SLR 972 | N/A | Cited for the principle that the court is at liberty to consider the material before it, unfettered by any principle limiting its fact-finding abilities. |
| Lee Hsien Loong v Review Publishing Co Ltd and another and another suit | High Court | Yes | [2007] 2 SLR(R) 453 | Singapore | Cited to show that there was sufficient evidence to show, at the time of the signing of the Treaty on Judicial Assistance in Civil and Commercial Matters between Singapore and the PRC, that the signatories did not intend for the treaty to apply to Hong Kong. |
| Asian Agricultural Products Ltd v Republic of Sri Lanka | N/A | Yes | N/A | N/A | Cited for the principle that international tribunals have stated that they are not bound by technical or judicial rules of evidence. |
| Rompetrol Group N.V. v Romania | N/A | Yes | N/A | N/A | Cited for the principle that international tribunals have stated that they are not bound by technical or judicial rules of evidence. |
| Pulp Mills (Argentina v Uruguay) | International Court of Justice | Yes | N/A | N/A | Cited for the principle that the Lao Government has the burden of proving that which it asserts. |
| The Mavrommatis Jerusalem Concessions | Permanent Court of International Justice | Yes | N/A | N/A | Cited for the principle that the Lao Government has the burden of proving that which it asserts. |
| Compania de Aguas del Aconquija SA and anor v Argentine Republic | N/A | Yes | N/A | N/A | Cited for the principle that events that take place before the critical date may affect jurisdiction; events that take place after the critical date do not. |
| Tza Yap Shum v Republic of Peru | N/A | Yes | N/A | N/A | Cited for the interpretation of a similarly worded BIT between the PRC and Peru. |
| Plama Consortium Limited v Republic of Bulgaria | N/A | Yes | N/A | N/A | Cited by the Lao Government to support the Narrow Interpretation. |
| Austrian Airlines v Slovakia | N/A | Yes | N/A | N/A | Cited by the Lao Government to support the Narrow Interpretation. |
| ST-AD GmbH v The Republic of Bulgaria | N/A | Yes | N/A | N/A | Cited by the Lao Government to support the Narrow Interpretation. |
| Vladimir Berschader and Moise Berschader v The Russian Federation | N/A | Yes | N/A | N/A | Cited by the Lao Government to support the Narrow Interpretation. |
| RosInvest Co UK Ltd v The Russian Federation | N/A | Yes | N/A | N/A | Cited by the Lao Government to support the Narrow Interpretation. |
| AES Corporation v The Argentine Republic | N/A | Yes | N/A | N/A | Cited for the principle that each BIT has its own identity and striking similarities in the wording of many BITs often dissimulate real differences in the definition of certain key concepts. |
13. Applicable Rules
| Rule Name |
|---|
| Order 69A of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A) | Singapore |
| Section 10 of the International Arbitration Act (Cap 143A) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Bilateral Investment Treaty
- Arbitration
- Jurisdiction
- Expropriation
- Macau Special Administrative Region
- Moving Treaty Frontier Rule
- Critical Date Doctrine
- Notes Verbales
- State Succession
- Treaty Interpretation
15.2 Keywords
- International Arbitration
- Bilateral Investment Treaty
- Jurisdiction
- Expropriation
- Singapore Court of Appeal
- Sanum Investments
- Lao Government
- Macau
- Treaty Interpretation
16. Subjects
- International Law
- Arbitration
- Treaties
- Investment Law
17. Areas of Law
- International Law
- Treaties
- Arbitration Law
- Civil Procedure
- International Arbitration