SG Arbitration says it has no power to stop Laos’ court action in district court

Singapore International Arbitration has concluded that it has no jurisdiction over the U.S. District Court for the NMI and other district courts and is not empowered to stop any action filed in those courts.

The Arbitral Tribunal, chaired by Judge Rosemary Barkett, issued the ruling on Aug. 17, 2015, in connection with Laos’ request for the U.S. District Court for the NMI to issue to subpoena against Saipan-based Bridge Capital LLC.

Attorney William Fitzgerald, counsel for Laos, filed in district court on Thursday a copy of the Arbitral Tribunal’s order.

The Arbitral Tribunal, however, ruled although they cannot stop the district court from acting, they can and do request Laos to continue its deferment of the 28 U.S.C. Section 1782 proceedings until the final hearing in this arbitration.

Section 1782 action refers to assistance to foreign and international tribunals and to litigants before such tribunals.

The Arbitral Tribunal said Laos’ failure to do so will be taken into consideration should the Tribunal conclude that Laos has breached the Deed of Settlement by filing the 1782 action in federal court.

The Arbitral Tribunal made the ruling in denying the application of Lao Holdings N.V. and Sanum Investments Limited (collectively called Sanum) to stop the 1782 proceedings.

Sanum owned 80 percent of Savan Vegas Casino Co. Ltd., while Laos owned 20 percent, according to the Tribunal’s records.

Last June 12, Laos filed in the District Court for the NMI an application for issuance of subpoenas pursuant to Section 1282 and to the United Nations Convention Against Corruption.

The subject of the subpoenas are Bridge Capital LLC, which owns shares of Sanum Investments Ltd. and is wholly owned by John Baldwin and Shawn Scott, and Bridge Capital’s chief financial officer, David Jensen.

At a scheduling conference on Thursday, as agreed by the parties, U.S. District Court for the NMI designated judge David O. Carter set the hearing on the application for issuance of subpoenas for Nov. 17, 2015 at 9am.

Fitzgerald appeared for Laos. Attorney Michael Dotts appeared as counsel for Bridge Capital LLC along with attorney Deborah Deitsch-Perez, who appeared telephonically.

In Laos’ application, Fitzgerald disclosed that Baldwin of Bridge Capital is under criminal and tax investigations in Laos for allegedly bribing Laos officials over $300,000 that caused termination of an audit and also cost the Lao government $70 million in lost tax revenue over a five-year period from the operations of Baldwin group’s casino.

Fitzgerald asked the federal court to allow Laos to serve a subpoena on Bridge Capital on Saipan, and on Bridge Capital chief financial officer David Jensen, in connection with the criminal and tax investigations in Laos and in connection with two international arbitration proceedings pending in Singapore.

The lawyer revealed that both the Lao proceedings and the arbitration proceedings directly involve entities owned and/or controlled by Baldwin and Shawn Scott, who own Bridge Capital LLC.

Fitzgerald asked the court to issue the subpoenas in order for Laos locate the evidence needed to establish criminal activity in Laos and to support its claims and defenses before the international arbitral tribunal.