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Attempt to sue government on cancelled lottery deal fails

2/25/10 - The political cancellation of a proposed lottery in Thailand  continues to generate expensive fall-out among the companies involved. In the latest development, a company that sued the government to recover its losses has failed in its action.
 
The Bangkok Post reports that the Thai Supreme Court this week overturned a lower court ruling that the Government Lottery Office should compensate private business Jago Co the billions of baht in damages it suffered when its contract to distribute online lottery tickets was suspended.
 
The Supreme Court said the contract awarded to Jago Co was invalid.
 
Jago was originally awarded the contract by the Government Lottery Office, but the government in power at the time subsequently placed the contract on hold in the face of strong political and public opposition to the lottery.
 
Jago, which was contracted to import and install about 5 000 lottery ticket dispensing machines in a deal worth billions of baht, sought intervention from an arbitration committee, which ruled in its favour.
 
The company later filed a lawsuit with the Civil Court, which in 2004 awarded it 2.5 billion baht in compensation as recommended by the arbitration panel, but the GLO appealed the ruling.
 
The Supreme Court said it had two points to consider: whether the contract fell under the Public-Private Joint Venture Act and whether it was valid. It concluded the contract was governed by the joint venture legislation because its value exceeded one billion baht.
 
It cited Jago's statement to the Council of State which estimated the investment cost of the scheme at 1.7 billion baht.
 
The joint venture legislation requires any contracts which are made with state agencies and worth more than one billion baht to be subject to Cabinet scrutiny. However, the online charity lottery distribution scheme had not been considered by the Cabinet and was therefore considered null and void.
 
Prosecutor Surat Sriwipat said yesterday the Supreme Court's ruling was considered final and the company could no longer appeal.
 
It is not known how the decision will impact a seperate dispute between the GLO and Loxley GTech Technology which also flows from the online lottery issue



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