Macau casino operator Wynn Macau has announced it has entered into an agreement with Leighton Asia to settle litigation over the construction of Wynn Palace.
“The Group and Leighton Asia have been in discussions with a view to resolving these differences and avoiding the potential for protracted dispute resolution proceedings. As a result of these discussions, on 28 October 2016, WRMSA, Palo and Leighton Asia entered into an agreement to settle all related matters,” said the operator in its filing.
As part of the settlement, Wynn Resorts (Macau) S.A (WRMSA) and Palo Real Estate Company will “release and pay US$21.1 million to Leighton Asia as money due for work completed,” pay Leighton an additional $199.8 million, another $55.2 million “upon final completion of works”, and up to $45.0 million “as and when outstanding, defective or nonconforming work is completed to the satisfaction of the group”.
Leighton Asia on the other hand has agreed to “complete all outstanding work necessary to achieve final completion…”
In January this year, Wynn Macau warned Leighton Asia that penalty payments would be demanded should construction milestones fail to be met regarding the construction of Wynn Palace.
The company has said that the total potential liability for delay damages may be as much as $200 million should the contractor fail to achieve “substantial” completion by the June deadline.
The luxury development finally opened on August 22, but Leighton Asia argued that the scope of work had changed during the course of the work and that extra time and money were needed as a result of the changes.