Singapore Court Ruling Limits Foreign Casino Debt Recovery

Foreign casino operators that provide credit to customers with assets in Singapore may need to reassess their ability to recover gambling debts through the city-state’s courts.

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Singapore law firm Rajah & Tann said a recent High Court ruling could affect how foreign casinos assess credit and enforcement risks. The decision involved Venetian Macau Ltd, the Sands China Ltd unit that holds the gaming concession for Macau casino operations, and businesswoman Hu Yangning.

Venetian Macau had obtained a Hong Kong judgment against Ms Hu for HKD19.35 million, or US$2.5 million. The company then sought to register the judgment in Singapore in an effort to recover the debt.

However, Singapore High Court judge Philip Jeyaretnam set aside the registration of the Hong Kong judgment. The court found that enforcing the judgment would be against Singapore’s public policy on gambling debts.

Foreign Judgments Cannot Be Registered

Rajah & Tann described the ruling as an important development in Singapore law concerning foreign judgments related to gambling debts.

According to the law firm, foreign casino operators cannot use Singapore’s statutory registration process to recover gambling debts through local courts, even if the operator has already obtained a valid judgment in another jurisdiction.

The practical result is that Singapore courts will not act as debt collectors for foreign casinos when it comes to gambling-related debts.

The law firm said foreign operators offering credit to customers with assets in Singapore now need to consider this enforcement barrier when making credit decisions and assessing risk.

The ruling applies to the registration process under Singapore’s Reciprocal Enforcement of Foreign Judgments Act, or REFJA. The case involving Venetian Macau Ltd provides the current legal position under that legislation, according to Rajah & Tann.

Regulated Casino Gambling Remains an Issue

The lawyers identified several questions that remain unresolved following the High Court decision.

One issue is whether the law should distinguish between debts arising from regulated casino gambling and debts linked to unregulated gambling.

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The High Court found that Singapore’s acceptance of some regulated gambling activities does not remove the country’s broader public-policy position against credit-based gambling.

However, Rajah & Tann noted that an earlier Singapore Court of Appeal case recognized that regulated casino gambling conducted as part of an integrated resort may not be against public policy.

The law firm said it remains unclear whether this distinction could affect the enforceability of foreign judgments under the REFJA. This question could be relevant when a foreign casino is properly licensed and subject to a regulatory system similar to Singapore’s.

The law has not yet addressed this issue directly.

Competing Public Policy Concerns

Another unresolved matter concerns the conflict between Singapore’s policy against enforcing gambling debts and its policy against allowing people to avoid legitimate financial obligations.

Rajah & Tann noted that Singapore legislation contains measures intended to prevent debtors from avoiding judgment debts. These include provisions related to bankruptcy and the examination of judgment debtors.

The High Court did not examine in detail how these policies should be balanced against the statutory position on gambling debt enforcement.

The lawyers also raised questions about international comity and reciprocity in the recognition of foreign judgments.

International comity refers to friendly relations and mutual respect between jurisdictions. Rajah & Tann said the judgment did not explore whether a purpose-based interpretation of the REFJA could limit the application of the public-policy objection.

The firm said it could be argued that international comity should receive greater weight when gambling takes place at a regulated foreign casino, especially if the customer involved is not Singaporean.

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Source: GGR Asia