Playtech hits back in Caliplay dispute

The dispute has been rumbling on for some time, with the most recent development coming last month when Caliplay launched legal proceedings to annul its partnership with Playtech.

Caliplay is a joint venture between Playtech and Mexico-facing operator Caliente. However, Caliplay is now seeking to end the legal relationship with Playtech. It has made the process public as it says it impacts the running of its regulated business in Mexico.

In August, the Mexican court accepted jurisdiction over the claim, issuing several interim orders pending final resolution of that claim. These include the suspension of certain rights held by Playtech under the agreements.

Playtech was also ordered to continue providing software and services to Caliplay pending resolution of the claim. This is despite the suspension of other rights including Playtech’s right to receive payments from Caliplay for such services.

Playtech: Caliplay’s Mexican court proceedings contravene contract agreements

At the time, Playtech said that it would take time to process the Mexican court ruling and respond later. Speaking today (2 November), Playtech says that while it accepts the proceedings, actions taken by Caliplay in Mexican court proceedings contravene contractual agreements in place since the strategic agreement was established in 2014.

In particular, Playtech highlighted an agreement that disputes between the parties would be resolved in England.

“One of the primary interim measures that the Mexican court granted was that all fees due to Playtech under its arrangements with Caliplay are to be paid into a court-mandated trust account in Mexico rather than paid directly to the group,” Playtech said.

“Consequently, the company understands that the fees due to Playtech for August (in part) and September have been paid into this court-mandated trust account. Other interim measures the Mexican court granted include the suspension of many rights and protections under the agreements.”

Playtech taking steps toward a resolution 

In order to protect its position and progress toward a resolution with Caliplay, Playtech has taken a number of steps.

These include its PT Services Malta business both applying for and securing interim anti-suit injunctions from the English courts against Caliplay. The injunctions compel Caliplay to stop taking more steps in Mexican proceedings, as litigation should not have been commenced in that jurisdiction.

Meanwhile, PT Services Malta has secured separate interim measures from a Mexico court ordering Caliplay to discontinue the case it commenced in Mexico against the relevant Playtech entities. This, Playtech says, will allow the dispute to be resolved in England. 

These measures also include orders for Caliplay to comply with the terms of the framework agreement between the parties. This, Playtech says, contains most of the provisions that have been suspended by the Mexican court.

Caliplay remains “highly important to Playtech”

Despite the ongoing argument, Playtech said it still holds Caliplay in high regard. It adds that it is keen to resolve the matter and move forward.

“Playtech will continue to take such other steps as it considers necessary to enforce its rights under its agreements with Caliplay and to lift the interim measures obtained by Caliplay,” Playtech said.

“Caliplay remains a highly important customer for Playtech. The company is determined to resolve this matter as quickly as possible. In order to do so, Playtech is committed to maintaining an open dialogue with Caliplay to discuss a path forward.”

How did we get here?

In February, Playtech sought a declaration from English courts to obtain clarification on a point of disagreement with Caliplay. This focused on whether Caliplay still holds an option to redeem an additional services fee element of the strategic agreement. 

This option was structured so the amount payable would be agreed between the parties. If this was not possible, the fee would be determined by an independent investment bank valuing Playtech’s current entitlement to receive the additional services fee until 31 December 2034.

For the six months to 30 June 2022 this fee was €34.4m and it was €22.3m in the previous year. This option, Playtech said, is stated as being exercisable for 45 days following the approval of the audited accounts of Caliplay for the year ended 31 December 2021. However, Playtech said the option had expired. 

Hitting back, Caliplay said it considers the option to have not yet expired. It also claimed it had no warning over Playtech’s decision to approach the courts on the matter.

In addition, Caliplay said Playtech failed to reference board approval in its announcement, or its interim report. At the time, Caliplay said it was keen to resolve the matter swiftly and was committed to the ongoing discussions.

Caliplay is yet to respond to the latest Playtech statement.