Local gaming construction company ICON Projects Limited has initiated legal actions against MGM China amounting to more than MOP300 million (US$37.5 million) in damages for allegedly unpaid renovation work contracts.
According to ICON’s lawyer, Sofia Linhares, the company headed by Brian Lay initiated the legal action at the Court of First Instance in June, 2019 claiming a total of MOP311 million in damages and losses, having also filed for an injunction order in August, 2019.
“We are waiting for the court date for the injunction order to be scheduled […] We have little hope the trial will be scheduled before Easter holidays, it will probably be after,” ICON’s lawyer told MNA.
In a lengthy memorandum sent to MNA, ICON accused MGM of failing to make payments related to ‘numerous open contracts and outstanding accounts’ which to date amount to well over MOP350 million in losses, expenses and incurred damages.
‘The amount of damages and loss incurred [since June, 2019] only increased due to interest and multiple other claims against ICON as a result of MGM’s non-payment and failure to take responsibility for their own multiple breaches of contracts including non-payment,’ ICON alledges.
The alleged payments that are due refer to two renovation work contracts, a MOP179.3 million contract for renovations in a VIP room on the first floor of MGM Cotai initiated on March 29, 2018, and a MOP69.7 million renovation contract at the MGM Macau L1 gaming areas that commenced on May 28 of the same year.
According to ICON, the company had provided several services to MGM since 2011, which was said to show the confidence the operator had in the company.
The company maintains that the MGM Cotai and MGM Macau contracts were terminated at the beginning of 2019 when the work was at 96.7 percent close to completion respectively, but that it still continued to work between February, 2019 through July, 2019 under promises by MGM that a, “fair, reasonable, and timely settlement would be arrived at” pending the outcome of a third party independent consultant, WTP Hong Kong’s, peer review
However, according to Ms.Linhares a commercial settlement proposal on April 18, 2019 was refused by MGM and the new consultant was dismissed and laid off by the gaming operator.
For the company MGM ‘admittedly continued to gain significant profits for seventeen months for works’ and labour completed by ICON and local SMEs; ‘ignored and reject their own contractually appointed representatives and consultants recommendations to fairly settle these multiple claims’; and ‘proceeded to terminate or release all representatives, consultants and staff responsible for the direct control of these projects’.
“ICON has tried until today and issued several notifications to MGM and its legal representatives to know if there was any chance for a settlement. What they proposed was completely unreasonable, proposing that we simply laid off all legal actions against them,” Linhares told MNA.
“We are willing to negotiate with MGM but with good faith and good sense”
The company claims it was forced to start legal action and issue an injunction in regards to the financial impact the matter has had on its business, with the company alleging it is, “damaged nearly beyond repair”, due to the complete loss of all credit and bonding capacity, foreign working quota permits for both labour and management, depletion of all remaining available operational cash reserves, in addition to the loss of reputation and professional integrity with all subcontractors and suppliers.
“ICON also lost a daily MOP1 million contract with a casino because it is now considered a risk brand because MGM informed the Labour Affairs Bureau and other companies that ICON did not fulfil its works,” Linhares added.
MGM China has defended in a reply sent to Macau News Agency (MNA) that it has respected its contractual obligations towards
“MGM, having a commercial relationship with a large number of small and medium-size local businesses, has at all times fulfilled its obligations towards them punctually. The facts brought to the public by ICON Projects Limited and its lawyer are being discussed in court in a lawsuit filed by ICON where MGM has already submitted its defense and made its own counterclaim against ICON. A judicial decision will be handed down in due course,” the company told MNA.
In addition, the gaming operator also added that too “publicly disclose this matter has the effect of influencing public opinion and placing illegitimate pressure on the courts”.
“Hence MGM will react against such disclosure in the appropriate forums and is certain that consequences will arise to those responsible for these actions,” the group noted.
When inquired whether as to why the memorandum was sent to the media, Linhares stated the memorandum was prepared to be sent to the MGM CEO Grant Bowie, but that due to the current precarious financial state the company, ICON’s CEO decided to make the issue public.
“[Mr. Lay] wanted to make sure the group’s top management in Las Vegas knew what is happening,” Ms. Linhares added.