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 its land 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 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 and 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

  This case is currently pending judgment of the President of the
  Supreme Court with respect to the jurisdiction. Upon receipt of the
  judgment of the President of the Supreme Court, the Southern Bangkok
  Civil Court would fix a hearing date of the President’s judgment and
  proceed with this case.

  The Opinion of the Lawyer

If the judgment is in the prosecutor’s favor, the EGM no. 1/2007 of the
accused held on 4 July 2007 and the aforementioned resolution of the
accused registered with the Public Company Registry Office must be
revoked.

If the judgment is in the accused’s favor, the EGM no.1/2007 of the
accused held on 4 July 2007 will not be revoked.

  The Management Opinion

  The EGM no. 1/2007 duly held and approved the resolution in compliance
  with the Articles of Association of the Company and applicable laws.
  Furthermore, the EGM resolution was accepted for Registration by the
  Public Registry Office.

  7.5 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”

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 a Company's
shareholder. 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, these 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 considers that the Company did not commit a tort against the
prosecutors as accused, therefore no provision has been made in the
accounts.

  The Management Opinion

We are confident that the Company will prevail in this case.