Melco International Development has announced that it has commenced arbitration with its joint venture partner in a proposed non-gaming development in Zhongshan, China.
The project related to a residential, commercial, recreational and entertainment development on a land plot comprising 504,000 square meters, proposed in 2021.
The project was set to include ‘ancillary facilities such as hotels, parks and green areas’.
The aggregate consideration payable by the joint venture company for the land use rights was set at approximately CNY4 billion ($620 million).
Melco in July of 2022 served a termination notice to the joint venture parties, indicating that certain provisions in the JV agreement had not been met.
This was furthered with a framework agreement to terminate the joint venture that stretched through late 2023.
In its Friday update, Melco indicated that it had commenced arbitration at the China International Economic and Trade Arbitration against Agile JV Parties, the project company it announced in 2021, and Agile Group Holdings, seeking compensation.
Melco further indicated that it has made an impairment on investment costs amounting to HK$104.17 million, as indicated in its 2024 interim report.
The request for arbitration was accepted by the arbitration commission, however as of Friday, the case ‘has not yet been heard’.
