UK: The Pitfalls Of Dispute Resolution In Multi-Party M&A

Last Updated: 9 July 2018
Article by Ben Giaretta

Disputes arising from M&A and joint venture arrangements can be complex. Multiple parties and multiple contracts create many possible dispute combinations, even in situations where the parties can be allocated to two distinct groups. Dispute resolution provisions need to be drafted carefully to cope with every possible eventuality. Where they are not, there is the risk that contractual remedies are ineffective. The Singapore High Court has recently considered such a situation in Sanum Investments Limited v ST Group Co, Ltd and others [2018] SGHC 141.

The facts

The gambling industry in Laos has grown substantially in the past decade. The casinos are located within Special Economic Zones set up by the Government and attract Thai and Chinese tourists in particular. One foreign investor, the Macau-based Sanum Investments Limited ("Sanum"), has had an especially chequered time since it first entered the industry in 2007 by way of a joint venture with a local company, ST Group Co, Ltd ("ST Group"). The main casino in the joint venture was first hit by a substantial tax bill, then confiscated and sold by the Government. There is an ongoing investment treaty arbitration about this as well as litigation in the USA.

At the same time, there has been an international commercial arbitration between Sanum and its joint venture partner about another property, a slot club at Thanaleng near the Thai border. That arbitration took place in Singapore under the SIAC Rules. Sanum alleged breach of contract because the Thanaleng slot club had not been passed to Sanum as agreed, when certain third party contracts expired in 2010 and 2011. The tribunal agreed with Sanum and in August 2016 it awarded Sanum US$ 200 million in damages, to be paid by the respondents in the arbitration, ST Group and three associated parties.

The respondents had not taken part in the arbitration. When Sanum took steps to enforce the award in Singapore, the respondents applied to the Singapore High Court to avoid enforcement on the basis that the tribunal did not have jurisdiction to render the award and the arbitration had not taken place in accordance with the parties' arbitration agreement. This led the Singapore High Court to review the joint venture arrangements.

Multiple contracts

The first issue was the relationship between the multiple contracts in the joint venture, namely, an overarching Master Agreement dated 30 May 2007, a Participation Agreement that set the term of the joint venture at 50 years, and three other agreements relating to the operation of the Thanaleng slot club. The issue here was that the five agreements treated dispute resolution differently. The Master Agreement contained a multi-tiered arbitration agreement, the wording of which was ambiguous; the Participation Agreement contained a clause specifying SIAC arbitration in Singapore; and the three other agreements did not refer to dispute resolution at all. In its award, the tribunal found it had jurisdiction under the Master Agreement and the Participation Agreement taken together, and thus SIAC arbitration in Singapore was appropriate. The judge disagreed. She concluded that the substance of the claim derived from the Master Agreement alone. Consequently, the tribunal could only derive jurisdiction from the (ambiguously worded) arbitration agreement in that contract.

Multiple parties

That finding gave rise to a number of additional questions. The first was whether the respondents were all party to the Master Agreement. If any were not party to it, the tribunal could not have jurisdiction over them. Apart from ST Group itself, which was obviously a named party, the identification of the Lao parties in the Master Agreement was unclear. The judge needed to examine the terms of the Master Agreement and concluded that two of the other respondents were parties because they owed obligations under it, but the fourth, a company called ST Vegas Enterprise Ltd. ("ST Vegas Enterprise"), was not a party. Consequently, the tribunal could only exercise jurisdiction over three of the four respondents. 

Multi-tiered dispute resolution

The next question was whether the arbitration had been properly started against all the respondents by following through the multi-tiered dispute resolution clause in the Master Agreement. That clause required negotiation, followed by an application to the Lao courts or to the Lao Organisation of Economic Dispute Resolution ("OEDR"), followed by arbitration. There had been actions in both the Lao courts and the OEDR before the arbitration was started. However, only three of the four respondents in the arbitration had been party to those previous legal proceedings. ST Vegas Enterprise had not been a party to those proceedings, and so the judge ruled that Sanum was not entitled to commence arbitration against it (even if ST Vegas Enterprise had been a party to the Master Agreement).

Ambiguous arbitration clause

Finally, the judge had to rule on the proper meaning of the arbitration clause in the Master Agreement. That clause referred disputes to arbitration "using an internationally recognized mediation/arbitration company in Macau". This could have meant (i) using an arbitration institution that was internationally recognised and located in Macau (with no reference to the seat of arbitration); (ii) using an arbitration institution that was acknowledged in Macau as being internationally recognised (again, with no reference to the seat of arbitration); or (iii) using an internationally recognised arbitration institution, with the seat of arbitration being Macau. The judge rejected the first interpretation since this would undermine the agreement to arbitrate (there being no internationally recognised arbitration institution located in Macau), and rejected the second interpretation because it required reading too much into the words that had been used.

That left the third interpretation.  However, there was a problem. While the SIAC is an internationally recognized arbitration institution, the arbitration award stated that the seat of the arbitration was Singapore, not Macau. Another problem derived from the fact that the appointment of three arbitrators had come from the Participation Agreement, while under the SIAC Rules the default position is appointment of a sole arbitrator. These problems might have meant that the arbitration award would not have been enforced. The judge, however, saw no material prejudice to the respondents as a result of the tribunal thinking the arbitration was seated in Singapore rather than Macau, and as a result of there being three arbitrators rather than one. As a result she decided not to exercise her discretion to refuse enforcement. Sanum could proceed to enforce the award against three of the respondents.


This case illustrates the point that dispute resolution provisions in multi-party M&A must be properly tied together across the transaction. In particular, it must be clear which contracts and parties the dispute resolution provisions refer to, they must be worded consistently across the transaction, and they must be unambiguous. Additionally, when a party commences dispute resolution under a multi-tiered clause, the clause must be followed carefully. Otherwise, there is a risk that the contractual remedies may be ineffective and unenforceable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Fenwick Elliott LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Fenwick Elliott LLP
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions