IPI must be allowed arbitration in disputes on the applicability of its force majeure defence.
Northern Mariana Islands.- Chief Judge Ramona V. Manglona has granted Imperial Pacific International LLC’s motion to seek arbitration in its dispute with the Commonwealth Casino Commission (CCC) over its force majeure defence for non-payment of casino licence fees.
IPI had sought an order requiring the CCC to participate in non-binding arbitration with the American Arbitration Association under Section 30 of its Casino Licence Agreement (CLA).
According to Mariana’s Variety, Manglona said: “IPI must be allowed to arbitrate all disputes on the applicability of its force majeure defence to the allegations contained in the 2021 complaints, lest Section 25 of the CLA is deprived of any meaning.”
She also granted IPI’s request for an injunction barring the CCC from conducting a withdrawal hearing.
Justice Manglona said: “There were two pivotal issues in the case at bar: 1) whether IPI has delayed and therefore waived the opportunity to seek arbitration under the CLA; and 2) whether a dispute on the applicability of a force majeure defence in the instant case is subject to Section 30’s dispute (i.e., arbitration) resolution process despite Section 30’s carve-out for revocation proceedings.”
The court found that while IPI waived its right to arbitrate the allegations in a 2020 complaint, it had not waived its right to arbitrate the allegations in a 2021 complaint.
Manglona stressed: “Although Section 30 specifically precludes arbitration for issues relating to revocation proceedings (such as the failure to pay annual dues), a force majeure defence that has not been waived must be allowed to go to arbitration.
“Otherwise, Section 25’s force majeure provision would be effectively nullified and deprived of any meaning.”
In May, IPI reported it had signed a memorandum of agreement with South Korea’s IH Group to secure funding to help it reopen its casino in Garapan and pay some of its obligations, including payroll and outstanding payables to vendors. However, there has been more no news regarding the agreement.