The court battle between a Thai businessman and the Laotian government is far from over, as a lawyer for Siva Nganthavee has filed an appeal against a Malaysian High Court verdict in December regarding a coal-fired power plant in the Hongsa district of Laos.
James Berger of King & Spalding LLP, which represents Mr Siva in the case, said court judgements against Laos in the US and Britain remain enforceable for collecting an arbitration award Vientiane was ordered to pay.
The High Court in Kuala Lumpur ruled last Dec 27 in favour of setting aside the award Laos was told to pay Thai-Lao Lignite (TLL) in late 2009.
With interest, the sum now totals US$73 million.
Founded by Mr Siva, TLL sought $57 million in compensation after the Laotian government terminated coal mining and power plant concessions with the firm in 2006.
But Vientiane refused to pay, prompting Mr Siva's side to seek enforcement of the arbitration award. In 2010, the New York State Supreme Court and Britain's High Court confirmed the award.
With the Malaysian ruling, lawyer David Branson, who represents the Laotian government in the case, said the award is now void. Vientiane will soon file to vacate the judgements in New York and London.
But TLL and HLL, the company set up by TLL in Laos, have appealed the Malaysian High Court's decision.
According to Mr Branson, a meeting will convene early this month to schedule the case in Appeals Court.
Mr Berger said the Malaysian verdict does not void or eliminate the court judgements in New York and Great Britain.
"Judgements in the US, England and France remain effective and enforceable. TLL/HLL will take all available steps to enforce the judgements and collect the $73 million that the government of Laos has refused to pay," Mr Berger told the Bangkok Post.
"TLL and HLL are very disappointed with the Malaysian court's decision to set aside the arbitration award, which was rendered by a pre-eminent tribunal of arbitrators and has been confirmed by courts in the US and the UK."
He said the companies are considering the next steps to ensure the Laotian government is held fully accountable for unlawfully terminating agreements with TLL and HLL and that it abides by its legal obligations.
Mr Berger said the amount of sunk costs claimed by TLL in the arbitration was $172 million. This number is exclusive of claims for lost profits.
But Mr Branson said TLL/HLL asked for and tried to get such "lost profits" in arbitration, but the arbitrators rejected the claim entirely, saying there was no evidence that TLL/HLL could ever have finished the project.
"TLL/HLL were never able in 10 years to get a power purchase agreement or bank financing to build a power plant," he said. "TLL/HLL simply didn't have the resources to perform the contracts. Such a 'profit' claim is blowing smoke."
In a release issued this week, Vientiane reaffirmed the transparency of the coal mine and power development in Hongsa and defended its decision to award the concession to Banpu Plc, one of Asia's leading coal miners, after scrapping the contracts with Mr Siva and TLL.
"The termination of both concession agreements in 2006 was necessary for the government of Laos considering what is of utmost benefit to the country," the release said, noting that the power project never commenced in 13 years under TLL.
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Writer: Nareerat Wiriyapong & Nalin Viboonchart