MRC: Enforce $5.46M judgment

Marine Revitalization Corp. filed with the Superior Court yesterday a lawsuit that seeks to enforce the arbitration judgment awarding it $5.46 million in its legal tussle with the government over the Outer Cove Marina.

Marine Revitalization Corp. and its founder, businessman Anthony Pellegrino, filed a complaint that seeks a court judgment confirming the award, impleading the Department of Lands and Natural Resources as defendant.

MRC and Pellegrino’s lawyer, Michael Dotts, told the court that the lease agreement between his clients and the government contained a provision for a binding arbitration should a dispute arise.

Dotts said the contracting parties also consented to the validity and finality of an arbitration judgment in an agreement reached earlier this year.

“Pursuant to the Submission Agreement, the parties agreed that the award to be made by the panel of arbitrators would be final and binding and may be enforced as if a judgment by the Commonwealth Superior Court,” Dotts said.

The lawyer asked the court to issue an order that would confirm the award made by the arbitrators and direct the entry of judgment on the award. He also asked that attorney’s fee and costs incidental to the filing of the suit be assessed against the government.

Earlier this month, arbitrators issued an order that assessed over $5.46 million against the CNMI government, in connection with the latter’s longstanding dispute with MRC.

The award totaled $5,468,818. The amounts are payable to Pellegrino, $3,377,513; Saipan Ice & Water, $1,083,400; Show Boat Inc., $3,877; Saipan Sea Ventures, $508,483; Pelly Boat Charter, $40,016; Pelly Enterprise, $46110; and Mobil Oil, $409,408.

The order also awarded attorney’s fees and expenses in the amount of $255,879.89 to the law firm of O’Connor Berman Dotts & Banes. It also set fees and expenses to arbitration officers Edward Manibusan, David Mair, and Robert A. Hefner in the amounts of $3,049, $2,250, and $11,992.10, respectively.

Pellegrino established MRC to build the Outer Cove Marina in the mid-90s, with the end objective of turning it over to the government. Arbitrators concluded that the marina project was a viable venture at that time because Saipan has limited mooring space at the Smiling Cove.

MRC then proposed the construction of the Outer Cove Marina, leasing submerged land that was memorialized in an agreement dated Aug. 24, 1995. A provision of the agreement bound the DLNR secretary to establish a policy barring owners of commercial passengers and fishing boats from renting slips at Smiling Cove. The provision wanted to divert commercial vessels to the Outer Cove Marina to ensure the viability of the project. MRC then proceeded to build the marina, which was opened in 1998.

However, a dispute between MRC and the government arose in 2001 after the latter not only failed to bar commercial vessels from renting slip space at Smiling Cove, but also actively solicited commercial lessees.

MRC’s position resulted in Pellegrino’s difficulty to pay off loans that were incurred in constructing the marina project, prompting it to seek rescission of the lease agreement.

After its suspension in 2002, arbitration proceeding resumed last Nov. 30. The arbitrators found the government breaching the intent of its partnership with MRC in connection with the marina construction.

The arbitration order came up with the award amount by ascertaining the cost of constructing the marina, including interests on loans obtained by Pellegrino, which were audited by the CNMI Public Auditor.