THE government of the Lao People’s Democratic Republic has petitioned the District Court for the NMI to enforce foreign arbitral awards against Bridge Capital LLC and its principal John Baldwin in the total amount of $5,026,983.98.
The Laos government, through attorney Colin M. Thompson, filed the petition on Monday and also named Lao Holdings N.V. and Sanum Investments Limited as defendants.
According to the lawsuit, Baldwin claims his residence is in Saipan and for many years used real property in Saipan as a residence, purchased and maintained real property in Saipan for investment purposes, operated his business in Saipan through the company he and Sean Scott own, Bridge Capital, and conducted a banking business in Saipan relating to his business activities.
Bridge Capital was formed in the CNMI in 2005 and conducted business in Laos for many years, the complaint added.
Baldwin formed Lao Holdings NV or LHNV as a corporation in 2012 under the laws of Aruba, the Netherlands Antilles, the complaint stated.
LHNV has a registered office in Aruba, but no employees are located there and no business activities are conducted there, the complaint added.
As for Sanum Investments, it was incorporated in Macau in 2005.
According to the complaint, Baldwin established Sanum to use as a corporate vehicle for his gaming investments in Asia.
Sanum’s registered office is in Macau, but no employees are located there and no business is conducted there, the complaint added.
LHNV and Sanum’s principal place of business is in Saipan, at and through the offices of Bridge Capital — Saipan are LHNV’s and Sanum’s “nerve center,” the complaint further alleged.
Investments in Laos
In 2007, according to the lawsuit, Baldwin learned of an opportunity to invest in new gaming projects in Laos.
With a local Laos partner, the ST Group, Baldwin invested in gaming businesses in Laos, the complaint stated.
Baldwin used Sanum to hold his interests in Laos’ gaming businesses and funded the investments through loans from Bridge Capital to Sanum, the complaint added.
It stated that Baldwin obtained a contractual interest in a slot club controlled by ST Group in Thanaleng, Laos using Bridge Capital funds, and developed a casino, the Savan Vegas Casino, in Savannakhet, Laos.
Claims against Laos
On August 14, 2012, Baldwin filed two Bilateral Investment Treaty or BIT claims against Laos.
The treaty between the People’s Republic of China and Laos, which Sanum could invoke as a Macau corporation, was an “early phase BIT” which provided investors a narrow range of rights, limited to expropriation, the complaint stated.
Intending to use newer international law claims, including “unfair and inequitable treatment,” and “denial of justice,” Baldwin, using a well-established treaty shopping plan, created LHNV to take advantage of the more favorable Netherlands/Laos Bi-Lateral Investment Treaty in its arbitration over the Thanaleng slot club against Laos, the complaint stated.
Baldwin inserted LHNV into the corporate ownership chain between himself and Sanum for this purpose, the complaint added.
In both arbitrations, LHNV and Sanum brought claims against the Laos government for alleged violations of its international responsibilities to protect foreign investors under the relevant treaties.
The collective total of the claims asserted against Laos amounted to $1 billion.
According to the complaint, the BIT Tribunals dismissed all LHNV’s claims and all of Sanum’s claims and awarded Laos its fees, expenses, and costs of the arbitrations.
The LHNV Tribunal awarded Laos $1,949,106.67 while Sanum Tribunal awarded Laos $1,778,252.21 for the total sum of $3,727,358.98.
Then on Dec. 19, 2017, LHNV/Sanum initiated another international arbitration under an arbitration agreement between LHNV/Sanum and San Marco Capital Partners LLC, and its owner, Kelly Gass, under the Rules of the Singapore International Arbitration Center or SIAC.
The SIAC Tribunal dismissed all LHNV/Sanum claims and awarded San Marco and Kelly Glass the sum of $437,200.
That tribunal further awarded Laos the sum of $862,425. The total award against LHNV and Sanum was $1,299,625, the complaint stated.
LHNV/Sanum then sued in Singapore to set aside the three awards.
On Nov. 6, 2019, LHNV and Sanum filed an action in the High Court of Singapore to “set aside” the two BIT awards.
The Singapore International Commercial Court dismissed LHNV’s and Sanum’s set aside action on Sept. 9, 2021.
LHNV/Sanum nonetheless appealed that decision to the Singapore Court of Appeal and a decision is pending.
Likewise, LHNV/Sanum filed an action in the High Court of Singapore to set aside the SIAC award on November 12, 2021.
That action was dismissed on June 1, 2022 by the Singapore International Commercial Court.
On June 29. 2022, LHNV and Sanum filed an appeal with the Singapore Court of Appeal and a decision is pending.
According to the lawsuit, there is a unity of interest and ownership between Baldwin and his companies.
Baldwin completely dominates and controls Bridge Capital, LHNV and Sanum, the complaint stated.
The BIT Tribunals each found as fact that Baldwin was the “directing mind” of LHNV and Sanum: “Mr. Baldwin is the directing mind of both claimant companies. His conduct throughout was to advance their corporate interests. His bad faith conduct is their conduct,” the complaint stated.
It added that Bridge Capital is the hub of “Baldwin’s wheel.”
Baldwin kept ownership of the LHNV and Sanum shares in his and his partner’s name, and the money is controlled by Baldwin’s “tentacles” in Bridge Capital, the complaint stated.
When Baldwin signed the Laos “Master Agreement in 2007” to invest in Laos, he used Sanum as the signatory on the Laos contracts; the funds all came through loans from Bridge Capital to Sanum that Baldwin personally authorized, the complaint stated.
In addition to the Sanum loan that Bridge Capital controlled, Baldwin created another source of funds for Bridge Capital to take out of Laos —a Bridge management contract to manage Sanum, for which Bridge Capital received additional fees, but Bridge Capital had no management personnel supervising the management of the casino in Laos, the complaint stated.
Baldwin used “loan payments” from the Savan Casino for personal use and use by related people and entities, the complaint added.
It stated that in 2009-2015, Baldwin routinely directed the chief financial officers of the Savan Vegas and Casino Co. to send millions of dollars to entities unrelated to Sanum or the Sanum loan.
After the BIT Tribunals allowed the Laos government to take control of the casino on April 15, 2015, Laos retained the services of BDO Global to conduct an audit of the Savan Vegas casino.
First, the complaint stated, BDO determined that Baldwin had sent, at a maximum, circa $40 million to Sanum for use in building the Savan Vegas casino complex.
Second, BDO determined that Baldwin had caused Savan Vegas to transfer $85.29 million as payments to Sanum and Bridge Capital on the ‘’Sanum loan” without applying any amount to the principal of the loan, the complaint stated.
It added that BDO also found that Baldwin was personally involved in these transfers.
BDO found that Baldwin directed the Savan Vegas CFO to send millions of dollars of the casino’s money, and thus 20% of Laos’ money, directly to himself, ($8,044,099); to Jim Baldwin, John Baldwin’s brother ($13,286,508); to Creative Entertainment, a new online gaming business John Baldwin started ($2,529,000); to Ha Tien Casino, a new casino Baldwin developed in Cambodia ($2,127,916); and to other Baldwin-related parties ($5,164,172), the complaint stated.
“All of these payments BDO identified were a fraud on the company and the minority shareholders, the Lao PDR, and ST Group. These payments demonstrate [John] Baldwin’s total control of LHNV and Sanum and his use of their funds for personal use and to the detriment of his partners and the company,” the complaint stated.
It also alleged that John Baldwin “engaged in criminal behavior” by “bribing government officials, paying a witness not to testify, stealing funds from the government’s co-owned investment, the Savan Vegas casino, and dealing in all phases of his operations with the government in bad faith.”
Variety was unable to get a comment from Bridge Capital.
