7. Legal Disputes

7.1 Criminal case at the Provincial Court of Phuket

Pre-Trial Case No. 3496/2542 between:

  Phuket Public Prosecutor “Prosecutor”

  Laguna Grande Limited “Co-Prosecutor”

  Mr. Akara Munin “1^(st) Accused”

  Mr. Pichit Siwapornjongjitr “2^(nd) Accused”

  Mrs. Somporn Panmanee “3^(rd) Accused”

  Background

  The Company reported to the Cherngtalay sub-district police station in
  January 1999 that the accused had trespassed on the land owned by
  Bangtao Development Limited covered by title deed 5916. The inquiry
  officer investigated and found that the accused were trespassing on
  the said land to conduct their business with a view to intentionally
  take possession of the land. Therefore, the inquiry officer prepared a
  prosecution charge against the accused. The case was then handed over
  to the Phuket public prosecutor for action. A prosecution charge was
  then issued against the accused by the public prosecutor. In late
  1999, the Company submitted a request to be a co-prosecutor in this
  case in hope of obtaining a judgment requiring the accused to demolish
  their construction and remove it from the land. On 15 October 2004,
  the Phuket Provincial Court found in favor of the prosecutors. The
  accused appealed against the judgment of the Court of First Instance
  to the Appeal Court.

  The Present Circumstances

  On 24 December 2008, the Appeal Court found in favor of the
  prosecutors. The accused are entitled to appeal against the judgment
  of the Appeal Court to the Supreme Court within thirty days after
  which the judgment of the Appeal Court is made.

  The Opinion of the Lawyer

  In the event that the accused appeals the judgment of the Appeal Court
  to the Supreme Court, we believe that the Company shall prevail at the
  Supreme Court.

  The Management Opinion

  This case is one of several cases where we protect our land title
  rights through the Courts as normally practiced by the Company. This
  case should not affect our ongoing operations.

  7.2 Criminal case with charge of encroachment on the state property at
  Laguna Beach Resort Hotel

  Black Case No. 1635/2548 between:

  Phuket Public Prosecutor “Prosecutor”

  Laguna Beach Club Limited “1^(st) Accused”

  Mr. Phitak Boonpojjanasoontorn “2^(nd) Accused”

Background

  On 24 April 2005, the public prosecutor brought this case to the
  Phuket Provincial Court charging the accused as having jointly
  encroached on the state property which is for the use of the public.
  If the Company were to lose this case then it would be required to
  tear down the offending structures of the beachfront bar, the water
  sports building and a sala. The hearing process of both prosecutor and
  accused had been taken already.

The Present Circumstances

  On 28 March 2006, the Phuket Provincial Court of First Instance made
  the judgment in favor of the accused by dismissing the prosecution of
  the public prosecutor. The public prosecutor has lodged the appeal
  against the aforementioned judgment and this is currently pending
  judgment of the Appeal Court.

  The Opinion of the Lawyer

  The accused constructed the Laguna Beach Resort Hotel in compliance
  with the plan that had been approved by all of the respective
  authorities and before the boundary lines were declared as the state
  property.

  The Management Opinion

  As all of the licenses and permits required to construct the hotel
  have been obtained, we are confident that we will prevail in this
  case.

7.3 Civil case against trespasser on land at Sheraton Grande Laguna
Phuket

  Case No. 1717/2541 at Phuket Provincial Court between:

  Bangtao Development Limited “Prosecutor”

  Mrs. Wasana Ar-Mud “Accused”

Background

  This case relates to a hawker who has trespassed on the land title NS3
  374, which belongs to Bangtao Development Limited. The case against
  the accused was brought to court on 19 November 1998 alleging
  trespassing on this land. The Court of First Instance and the Appeal
  Court found in favor of the accused, reasoning that the Court was not
  able to find evidence that the accused had trespassed on the Company’s
  land, and dismissed the prosecutor’s claim. The prosecutor later
  appealed against the judgments to the Supreme Court.

  The Present Circumstances

  The Appeal Court made the judgment on 14 November 2006 in favor of the
  accused. The prosecutor has lodged the appeal against the
  aforementioned judgment and this is currently pending judgment of the
  Supreme Court.

The Opinion of the Lawyer

  Further related legal points have been presented for the Supreme
  Courts consideration and no further hearings are required.

  The Management Opinion

  This case is one of several cases where we protect our land title
  rights through the Courts as normally practiced by the Company, and
  should not affect our ongoing operations.

4.  Civil case for the revocation of the resolution of the Extraordinary
    General Meeting of Shareholders and cancellation of the registration
    of the resolution

  Black Case No. 6710/2550 between:

  TMB Bank Public Company Limited “Prosecutor”

  Laguna Resorts & Hotels Public Company Limited “Accused”

  Background

  The case was brought to the Southern Bangkok Civil Court on 18 July
  2007, in which the Company is accused. Upon the plaint, the prosecutor
  asks the Court to revoke the resolution of the Extraordinary General
  Meeting of Shareholders of the accused No.1/2007 held on 4 July 2007
  (the “EGM”) and to cancel the registration of the aforementioned
  resolution on the grounds that the accused and the chairman of the EGM
  did not allow the prosecutor to attend the EGM. The prosecutor is not
  a shareholder of the Company. The Company believes that the EGM was
  duly held and approved the resolution in compliance with its Articles
  of Association and applicable laws. The accused, filed a motion with
  the Southern Bangkok Civil Court requesting for this case to be
  forwarded to the President of the Supreme Court for his judgment
  whether this case falls under the jurisdiction of the Civil Court or
  the Bankruptcy Court. The Court granted the motion and forwarded this
  case to the President of the Supreme Court.

  The Present Circumstances

  The Southern Bangkok Civil Court set 8 June 2009 to hear an outcome of
  the judgment of President of the Supreme Court in relation to the
  issue of the jurisdiction of the Courts. According to the judgment of
  President of the Supreme Court, this case falls under the jurisdiction
  of the Bankruptcy Court. As a result, the Southern Bangkok Civil Court
  struck this case out of the case list.

  The Opinion of the Lawyer

  As indicated above, the Company has prevailed in this case with
  regards to the Court of Jurisdiction.

  The Management Opinion

  As per the opinion of the lawyer above.

  7.5 Revocation of Shareholders’ resolutions and cancellation of the
  registration of the resolution

  Black case No. 12/2552 between:

  TMB Public Company Limited “Prosecutor”

  Laguna Resorts & Hotels Public Company Limited “Accused”

  Background

  This case was brought to the Central Bankruptcy Court on 5 August 2009
  as a result of the judgment of President of the Supreme Court as
  mentioned in the outstanding litigation no. 7.4 thereof. Upon the
  plaint, the prosecutor asked the Court to revoke the resolution of the
  Extraordinary General Meeting of Shareholders of the accused No.1/2007
  held on 4 July 2007 (the “EGM”) and to cancel the registration of the
  aforementioned resolution on the grounds that the accused and the
  chairman of the EGM did not allow the prosecutor to attend the EGM.
  The prosecutor is not a shareholder of the Company.

  The Present Circumstances

  This case is currently pending at the Central Bankruptcy Court.

  The Opinion of the Lawyer

  We strongly expect to prevail in this case on the ground that the EGM
  no.1/2007 was held in compliance with the Articles of Association of
  LRH. In addition, the resolution has been duly registered with the
  Public Registry Office of the Commerce Ministry.

  The Management Opinion

  As per the opinion of the lawyer above.

  7.6 Civil case with tort and claim of damages

  Black case No. 5773/2551 between:

  Avenue Asia Capital Partner L.P. and co-prosecutors, six in total
  “Prosecutors”

  Laguna Resorts & Hotels Public Company Limited “6^(th) accused”

Background

A case was brought to the Southern Bangkok Civil Court on 3 July 2008 in
which the Company is one of the accused. Upon the plaint, the six
prosecutors in total claimed that they are the creditors of one of the
Company's shareholders. They asserted that in arranging the
Extraordinary General Meeting of Shareholders No. 1/2007 and approving
the capital increase by the shareholders where some shareholders did not
subscribe for newly issued shares, were the actions jointly undertaken
by the shareholders and the Company to commit a tort against the
prosecutors. Thus, they demanded the Company to pay the damages of Baht
539,052,407 to them with interest of 7.5 percent per year and the costs
of the legal proceedings.

  The Present Circumstances

This case is currently pending at the Court of First Instance.

Opinion of the lawyer

The Company did not commit a tort against the prosecutors as accused.

  The Management Opinion

As per the opinion of the lawyer above.

  7.7 Breach of the Condominium Sale and Purchase Agreement, principal
  and agent, wrongful act and claim of damages

  Black case No. 2290/2552 between:

  Allamanda 1 Condominium Juristic Person and 9 Unit Owners
  “Prosecutors”

  Laguna Grande Limited, Bangtao Development Limited, Bangtao (1)
  Limited, “Accused”

  Bangtao (2) Limited, and 10 individual directors

  Background

  This case was brought to the Phuket Provincial Court on 8 October
  2009, in which 4 of LRH’s affiliated companies and 10 individual
  directors are the accused. The prosecutors referred in the plaint that
  they purchased units in Allamanda 1 Condominium from Laguna Grande
  Limited during 1991-1995. The Sale and Purchase Agreement called for
  an area of approximately 20 Rai. On registration of Allamanda 1
  Condominium, Allamanda 1 Condominium was registered with only 9 Rai 2
  Ngan 9 Square Wah. As a result, the accused have breached the Sale and
  Purchase Agreement. Therefore, the prosecutors requested the accused
  to completely deliver the common area as specified by the Agreement by
  transfer of the land totaling 10 Rai 3 Ngan 97.1 Square Wah to
  Allamanda 1 Condominium Juristic Person, as the 10^(th) prosecutor, or
  to be jointly liable for the compensation of Baht 131,913,000 in case
  the transfer of land cannot be made. The prosecutors also requested
  for additional compensation in the amount of Baht 55,685,895 for
  unlawful use of the land which is supposed to be common property of
  Allamanda 1 Condominium. The total amount of claim is Baht 187,598,895
  with interest at the rate of 7.5 percent per annum from the date claim
  is lodged until the accused have made full payment. The prosecutor
  also claimed that the former and current directors of those
  subsidiaries as the 5^(th) to 14^(th) accused were the representatives
  of the subsidiaries being the 1^(st) to 4^(th) accused, and therefore
  must also be jointly liable with those subsidiaries.

  The Present Circumstances

  This case is currently pending at the Court of First Instance.

  Opinion of the Lawyer

  The Company considers that the Company did not breach the Sale and
  Purchase Agreement and commit a wrongful act against the prosecutors
  as accused.

  The Management Opinion

  As per the lawyer comment.