CPA, IPI-contracted yacht firm settle

The Commonwealth Ports Authority and Phoenix Services Inc., the yacht firm contracted by Imperial Pacific International (CNMI) LLC in 2016 to provide yachting services for its VIP clients, have reached a settlement in the ongoing breach of contract lawsuit CPA filed in the U.S. District Court for the NMI.

CPA, through attorney Robert Torres; and Phoenix Services, through attorney Stephen Nutting, informed District Court for the NMI Magistrate Judge Heather Kennedy last Thursday that they have reached a settlement agreement.

“Court noted that parties were in a settlement conference earlier today and have reached a settlement. Parties further discussed and clarified the terms of the settlement. All parties agreed to material terms of settlement,” Kennedy stated.

The judge vacated pending dates in this matter and ordered the parties to file a stipulated motion to dismiss on or before May 22, 2023.

According to Saipan Tribune archives, CPA filed a breach of contract suit against Phoenix Services Inc. and Pride Keen Limited, the two companies that IPI had hired to provide VIP amenities to IPI patrons in the form of access to or use of luxury yachts.

CPA’s lawsuit named Phoenix Services as the entity that procured the yachts from Pride Keen and signed a lease agreement with CPA for the use of Saipan’s commercial docks. Due to breaching this agreement, CPA claims Phoenix Services owes the agency over $91,000 in delinquent fees. CPA was demanding damages to be determined at trial, plus interest of 9% per year.

According to the lawsuit, Phoenix Services leased Charlie Dock 2 from CPA from December 2015 to November 2020. In October 2019, Phoenix Services submitted a bunker application in order to also lease Delta Dock from CPA. CPA and Phoenix Services entered into an agreement, with CPA issuing the entity a revocable permit for the use of Delta Dock. Phoenix agreed to pay home port fees per vessel that would be docked there, in addition to a monthly permit fee.

Sometime in March 2020, the business scheme faltered and ceased operations due to the pandemic and Phoenix Services failed to pay for both the use of Charlie Dock 2 and Delta Dock.

CPA entered into an alternative agreement with Phoenix Services soon after, reducing the fees for the use of Delta Dock in consideration of the pandemic and its impact on the economy.

Then, in February 2021, Phoenix Services asked for discounts on the monthly permit fee, to which CPA obliged by waiving 50% of the monthly permit fee from October 2020 to March 2021. CPA also provided the company with a draft of a promissory note for repayments toward past due fees.

On March 30, 2021, CPA and Phoenix Services entered into an agreement regarding the promissory note, with Phoenix Services promising CPA that it would pay its debts from the Charlie Dock lease agreement and the Delta Dock permit. The total amount due to CPA is $91, 827.35.

Phoenix Services has only made two payments toward the promissory note—a $5,000 payment on April 28, 2021, and another on July 16, 2021, totaling $10,000.

Phoenix Services has made no additional payments, CPA states, even after CPA’s notice of default and demand for full payment on Sept. 29, 2021.