Lao Holdings NV v Government of the Lao PDR: Setting Aside ICSID & PCA Awards for Bribery & Corruption Allegations

The Singapore International Commercial Court dismissed applications by Lao Holdings NV and Sanum Investments Limited against the Government of the Lao People’s Democratic Republic to set aside International Centre for Settlement of Investment Disputes and Permanent Court of Arbitration awards. The court upheld the awards, which were against the plaintiffs' claims. The court ordered the plaintiffs to pay costs to the defendant.

1. Case Overview

1.1 Court

Singapore International Commercial Court

1.2 Outcome

Applications dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court dismisses applications by Lao Holdings NV and Sanum Investments Limited to set aside ICSID and PCA arbitration awards, upholding decisions against their claims.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lao Holdings NVPlaintiffCorporationApplications dismissedLost
The Government of the Lao People’s Democratic RepublicDefendantGovernment AgencyApplications dismissedWon
Sanum Investments LimitedPlaintiffCorporationApplications dismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Quentin LohJudge of the Appellate DivisionYes
Vivian RamseyInternational JudgeNo
Douglas JonesInternational JudgeNo

4. Counsels

Counsel NameOrganization
Ho Yi JieWongPartnership LLP
Lin Weiqi WendyWongPartnership LLP
Chong Wan Yee MonicaWongPartnership LLP
Ling Jia YuWongPartnership LLP
Cavinder BullDrew & Napier LLC
Tan Yuan KhengDrew & Napier LLC
Lim GeruiDrew & Napier LLC
Tan Sih SiDrew & Napier LLC
Lim Qiu Yi, ReginaDrew & Napier LLC

4. Facts

  1. Lao Holdings NV and Sanum Investments Ltd initiated arbitrations against the Government of the Lao People’s Democratic Republic.
  2. The arbitrations were conducted under the International Centre for Settlement of Investment Disputes and the Permanent Court of Arbitration.
  3. The plaintiffs alleged that officials from the Government of the Lao People’s Democratic Republic had reneged on earlier commitments.
  4. The BIT Tribunals dismissed the plaintiffs’ claims and ordered the plaintiffs to pay costs.
  5. The plaintiffs filed applications to set aside the BIT Awards in the Singapore High Court.
  6. The applications were transferred to the Singapore International Commercial Court.
  7. The court dismissed both applications to set aside the BIT Awards.

5. Formal Citations

  1. Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matter, Originating Summons No 5 of 2020, [2022] SGHC(I) 6
  2. Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matter, Originating Summons No 6 of 2020, [2022] SGHC(I) 6
  3. Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matter, , [2021] 5 SLR 228

6. Timeline

DateEvent
LH and Sanum file their respective Notices of Arbitration
GOL files jurisdictional objection in the PCA Arbitration
PCA Tribunal finds that it has jurisdiction
GOL files HC/OS 24/2014 to challenge the PCA Tribunal’s ruling on jurisdiction
The plaintiffs and GOL enter into the Settlement Deed, together with a Side Letter executed on 18 June 2014
Consent orders are signed by the BIT Tribunals to suspend the BIT Arbitrations
The plaintiffs file applications in the BIT Arbitrations alleging that GOL had materially breached the Settlement Deed’s terms
The Singapore High Court releases judgment in HC/OS 24/2014: Government of the Lao People’s Democratic Republic v Sanum Investments Ltd
The First Material Breach Application is dismissed by the ICSID Tribunal
LH files a second application in the ICSID Arbitration to revive the proceedings on the basis of GOL’s material breaches of the Settlement Deed
The Singapore Court of Appeal reverses the High Court’s decision and reinstates the PCA Tribunal’s ruling on jurisdiction: Sanum Investments Ltd v Government of Lao People’s Democratic Republic
The BIT Tribunals grant both applications to revive the proceedings. The BIT Arbitrations are revived.
GOL files a formal application to adduce additional evidence to the BIT Tribunals
The plaintiffs file submissions objecting to GOL’s Application for Additional Evidence
BIT Tribunals decide to admit all the evidence relating to GOL’s allegations of bribery, corruption and fraud
The plaintiffs file an application to introduce further material to rebut GOL’s newly-admitted evidence
BIT Tribunals allow the Application for Rebuttal Evidence in part
GOL applies to introduce, inter alia, the witness statement of Mr Angus Roderick Noble
BIT Tribunals allow the Noble WS to be admitted
Merits hearing of the BIT Arbitrations in Singapore
Proceedings in the BIT Arbitrations are declared closed
BIT Tribunals issue the BIT Awards dismissing the plaintiffs’ claims and ordering the plaintiffs to pay costs
The plaintiffs file applications to set aside the BIT Awards in the Singapore High Court in HC/OS 1389/2019 and HC/OS 1390/2019
The Applications were transferred to the SICC
The parties were heard on 15 and 16 January 2021
Parties were heard orally on Prayer 3 and the issue of redaction
The Judgment was handed down
Date of first hearing
Date of Judgment

7. Legal Issues

  1. Setting Aside Arbitration Award
    • Outcome: The court dismissed the applications to set aside the arbitration awards.
    • Category: Substantive
    • Sub-Issues:
      • Exceeded jurisdiction
      • Breach of agreed arbitral procedure
      • Denial of reasonable opportunity to be heard
  2. Costs in SICC Proceedings
    • Outcome: The court determined the appropriate costs to be awarded to the successful party, considering pre- and post-transfer costs, and the principles of reasonableness and proportionality.
    • Category: Procedural
    • Sub-Issues:
      • Pre-transfer costs
      • Post-transfer costs
      • Reasonable costs
      • Application of Appendix G

8. Remedies Sought

  1. Setting Aside Arbitration Award
  2. Costs

9. Cause of Actions

  • Breach of Bilateral Investment Treaty
  • Setting Aside Arbitration Award

10. Practice Areas

  • Commercial Litigation
  • International Arbitration
  • Investor-State Dispute Settlement

11. Industries

  • Gaming
  • Hospitality

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matterSingapore International Commercial CourtYes[2021] 5 SLR 228SingaporeThe current judgment concerns the issue of costs in relation to the dismissal of the applications in this cited case.
Sanum Investments Limited v ST Group Co, Ltd and othersSingapore High CourtYes[2020] 3 SLR 225SingaporeCited as part of the background of the dispute between the parties.
ST Group Co Ltd and others v Sanum Investments Ltd and another appealSingapore Court of AppealYes[2020] 1 SLR 1SingaporeCited as part of the background of the dispute between the parties.
ST Group and others v Sanum Investments LimitedSingapore Court of AppealYes[2022] SGCA 2SingaporeCited as part of the background of the dispute between the parties.
Government of the Lao People’s Democratic Republic v Sanum Investments LtdSingapore High CourtYes[2015] 2 SLR 322SingaporeCited for the High Court's disagreement with the PCA Tribunal on its ruling on jurisdiction.
Sanum Investments Ltd v Government of Lao People’s Democratic RepublicSingapore Court of AppealYes[2016] 5 SLR 536SingaporeCited for the Court of Appeal reversing the High Court’s decision and reinstating the PCA Tribunal’s ruling on jurisdiction.
CBX and another v CBZ and othersSingapore Court of AppealYes[2022] 1 SLR 88SingaporeCited for the principles relating to the distinction between pre- and post-transfer costs in SICC proceedings.
Maryani Sadeli v Arjun Permanand Samtani and another and other appealsSingapore Court of AppealYes[2015] 1 SLR 496SingaporeCited for the Court of Appeal’s account of the principles underlying the rules concerning costs in civil proceedings.
Then Khek Koon and another v Arjun Permanand SamtaniSingapore High CourtYes[2014] 1 SLR 245SingaporeCited for explaining the indemnity principle and its component rules.
Kiri Industries Ltd v Senda International Capital Ltd and anotherSingapore International Commercial CourtYes[2022] 3 SLR 174SingaporeCited for the SICC's observation that 'reasonable costs' means there is only a single attenuation.
CPIT Investments Ltd v Qilin World Capital Ltd and anotherSingapore High CourtYes[2018] 4 SLR 38SingaporeCited for the express disapplication of Order 59 by Order 110 rule 46(6) of the Rules of Court indicates very clearly that a different costs regime applies in the SICC.
Astro Nusantara International BV and others v PT Ayunda Prima Mitra and othersSingapore High CourtYes[2013] 1 SLR 636SingaporeCited as an example where Appendix G was departed from and a much higher level of costs was awarded.
Millenia Pte Ltd (formerly known as Pontiac Marina Pte Ltd) v Dragages Singapore Pte Ltd (formerly known as Dragages et Travaux Publics (Singapore) Pte Ltd) and others (Arup Singapore Pte Ltd, third party)Singapore High CourtYes[2019] 4 SLR 1075SingaporeCited as an example where Appendix G was clearly inapplicable and put aside by all parties.
China Machine New Energy Corp v Jaguar Energy Guatemala LLC and anotherSingapore High CourtYes[2018] SGHC 101SingaporeCited as an example where even under O 59, the costs orders can be very substantial, if justified.
China Machine New Energy Corp v Jaguar Energy Guatemala LLC and anotherSingapore Court of AppealYes[2020] 1 SLR 695SingaporeCited as an example where even under O 59, the costs orders can be very substantial, if justified.
B2C2 Ltd v Quoine Pte LtdSingapore High CourtYes[2019] 5 SLR 28SingaporeCited for the principle that the SICC costs regime should be responsive to the reality that parties would naturally spend more to vindicate themselves in court proceedings.
CBX and another v CBZ and othersSingapore High CourtYes[2021] 3 SLR 10SingaporeCited as an example of a setting-aside application in an international investor-state arbitration case.
CJM and others v CJTSingapore High CourtYes[2021] 5 SLR 222SingaporeCited by the plaintiffs to argue that the post-transfer costs should be fixed at S$35,000.
BYL and another v BYNSingapore High CourtYes[2020] 4 SLR 204SingaporeCited by the plaintiffs to argue that the post-transfer costs should be fixed at S$35,000.
BXS v BXTSingapore High CourtYes[2019] 5 SLR 48SingaporeCited by the plaintiffs to argue that the post-transfer costs should be fixed at S$35,000.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore
UNCITRAL Model Law on International Commercial ArbitrationSingapore
Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed)Singapore
Rules of CourtSingapore
Civil Law Act (Cap 43, 1999 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • International Centre for Settlement of Investment Disputes
  • Permanent Court of Arbitration
  • Bilateral Investment Treaty
  • Bribery
  • Corruption
  • Setting Aside
  • Costs
  • Reasonable Costs
  • Pre-transfer costs
  • Post-transfer costs
  • Settlement Deed

15.2 Keywords

  • Arbitration
  • ICSID
  • PCA
  • Setting Aside
  • Costs
  • Singapore International Commercial Court
  • BIT
  • Investment Treaty

17. Areas of Law

Area NameRelevance Score
Costs95
Civil Practice80
International Arbitration75
Arbitration70
International Commercial Law65
Civil Litigation60
International Centre for Settlement of Investment Disputes (ICSID)60
Permanent Court of Arbitration50
Enforcement of Foreign Judgments50
Private International Law50

16. Subjects

  • Arbitration
  • International Commercial Law
  • Civil Procedure
  • Costs