AGO says govt regained full rights to Outer Cove Marina

The CNMI government has full rights to the Outer Cove Marina even though it has not yet paid damages awarded by the court to Marine Revitalization Corp., according to the Attorney General’s Office.

Assistant attorney general Kristin St. Peter said that the 2004 arbitration order, which resolved the dispute between MRC and the government, rescinded the firm’s lease of the marina and returned to the government all the rights, title, and interest to the facility and its underlying land.

The Superior Court’s stipulated judgment order dated Jan. 27, 2005, which affirmed the arbitration order, again rescinded the lease, she added.

ÅgEven though the CNMI government has yet to pay the damages ordered by the Superior Court, the government is endowed with its original right, title and interest to the marina’s underlying land and any improvements located thereupon,Åh St. Peter said in a legal opinion addressed to Gov. Juan N. Babauta.

Åg[I]t’s as if the lease never occurred and both parties are returned to their pre-lease positions. For MRC, this means that all right to Outer Cove Marina and its underlying land are terminated. The CNMI, on the other hand, once again possesses its original right, title and interest to the Outer Cove Marina and its submerged and contiguous lands,Åh she added.

According to St. Peter, if the ongoing negotiations between MRC and the CNMI fail to result in a schedule for payment of damages awarded, MRC could take the government back to court.

ÅgHowever, until such time as a court amends the stipulated judgment order, the order is binding and the CNMI owns the Outer Cove Marina and its land,Åh the assistant attorney general said.

On Aug. 25, 1995, MRC agreed to lease from the Department of Lands and Natural Resources submerged and other lands for the purpose of constructing the Outer Cove Marina.

In 2001, a dispute arose between the parties, with MRC accusing DLNR of breaching a provision of the lease agreement requiring DLNR to establish a policy barring owners of commercial passengers and fishing boats from renting slips at Smiling Cove. According to MRC, the government not only failed to bar commercial vessels from renting slip space at Smiling Cove but it also actively solicited commercial lessees as well.

To resolve the dispute, both parties entered arbitration. In 2004, the arbitration panel awarded MRC damages.