Arbitration hearing on IPI, CCC dispute is complete; no arbitrator decision yet

Commonwealth Casino Commission board chair Edward C. DeLeon Guerrero, left, smiles as he explains something while Sen. Corina L. Magofna (Ind-Saipan) and CCC vice chair Rafael S. Demapan listen during a break in the board’s monthly meeting yesterday morning in the CCC conference room at the Springs Plaza in Gualo Rai. (FERDIE DE LA TORRE)

The three-day arbitration hearing in Honolulu, Hawaii on a legal dispute between Imperial Pacific International (CNMI) LLC and the Commonwealth Casino Commission was completed Friday, but arbitrator Thomas J. Brewer has yet to issue a decision, according to CCC board chair Edward C. DeLeon Guerrero yesterday.

“We are hopeful and confident that the CNMI prevails in the arbitration,” said DeLeon Guerrero during the CCC board’s regular monthly meeting in the CCC conference room at the Springs Plaza Building in Gualo Rai.

There’s no time frame as to when Brewer will issue a decision.

Arbitration is essentially an out-of-court procedure wherein two parties agree on one or more arbitrators to decide on their dispute in order to resolve a disagreement.

IPI, through counsel, raised a force majeure defense, among other arguments, in its legal dispute with CCC before the U.S. District Court for the NMI. Force majeure refers to an unforeseeable circumstance that hinders a party from fulfilling its part in a contract.

IPI argued that it could not carry out its financial obligations under the Casino License Agreement as a result of Super Typhoon Yutu, followed by the COVID-19 pandemic, which negatively impacted their business.

On Aug. 24, 2022, U.S. District Court for the NMI Chief Judge Ramona V. Manglona granted IPI’s request for a preliminary injunction to prohibit CCC from revoking IPI’s Saipan exclusive casino license. The judge allowed IPI to pursue its right to arbitration.

That arbitration took place on May 23, 24, and 25 in Honolulu, Hawaii.

DeLeon Guerrero said he provided online testimony via Zoom on the second day.

He said assistant attorneys general Keisha Blaise and Alison Nelson, who is the chief of the Office of the Attorney General’s Civil Division, appeared for the CCC and the government.

DeLeon Guerrero said Nelson made the closing arguments.

He said Blaise and Nelson are still in Hawaii.

The chairman briefly discussed at the board meeting the status of CCC’s ongoing litigations against IPI in CNMI courts.

IPI had appealed to the CNMI Supreme Court Superior Court Associate Judge Wesley Bogdan’s ruling that affirmed CCC’s order suspending IPI’s exclusive casino license.

DeLeon Guerrero said the CNMI Supreme Court heard oral arguments in January 2023 and that they are still waiting for the decision.

The CCC also appealed to the U.S. Court of Appeals for the Ninth Circuit Manglona’s decision to grant IPI’s request for a preliminary injunction and motion to compel arbitration.

DeLeon Guerrero said the mediator basically terminated the mediation proceedings and forwarded the appeal directly to the Ninth Circuit for oral argument that’s scheduled for June 8, 2023.

Similarly, DeLeon Guerrero said, they had a separate motion filed in the Superior Court for an aid in judgment, to assist the Commonwealth in enforcing CCC’s prior ruling, which is the one that IPI had appealed to the Supreme Court.

“And the reason for that is because IPI did not file a stay. So we have a pending request for an aid of judgment before Judge Bogdan,” he said.

DeLeon Guerrero said he believes it’s traditional that the initial judge who heard the case would also be the judge that they will file the request for aid of judgment. He said Bogdan, however, recused himself and the matter went to Superior Court Presiding Judge Roberto C. Naraja.

“We do not know who will be hearing the case. But we have not heard from Presiding Judge Naraja yet on that case,” the chairman said.

He said IPI has attempted to diverge time by requesting for a global settlement.

DeLeon Guerrero said IPI is basically taking the position that because the CCC suspended their casino license, they’re not able to secure additional funding from investors and there’s a possibility they might lose their gaming license.

On the other hand, he said, the Commonwealth has an obligation to assure that the licensee is financially suitable. “And if they’re not financially suitable, they have no business hanging on to the gaming license. And it’s our obligation and our duty as regulators to enforce it,” the chairman pointed out.

In so doing, he said, no matter what the outcome of these litigations, of this global settlement, the law remains that there’s only one license and there’s only one exclusivity.

“There is no settlement yet. But what I’m saying is that if there should be any settlement, that IPI should give up exclusivity,” the chairman said.