IPI-contracted yacht firms sued for alleged breach of contract

The Commonwealth Ports Authority is suing two yacht companies that brought in five yachts to the CNMI pursuant to a business scheme with Imperial Pacific International (CNMI) LLC but failed to keep up with its lease payments for use of the CNMI’s commercial docks.

CPA recently filed a breach of contract suit at the Superior Court 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.

According to CPA’s lawsuit, Phoenix Services, as the entity that procured the yachts from Pride Keen and signed into a lease agreement with CPA for the use of Saipan’s commercial docks, owes the agency over $91,000 in delinquent fees.

Robert Torres, who represent CPA in this matter, is asking the court to grant judgment in favor of CPA in the form of damages, with the total to be determined at trial plus interest of 9% per year.

Torres also asks that the court issue an order requiring the luxury yachts, specifically Mariana 4 and Mariana 5, to remain docked at CPA’s Delta dock at the defendant’s expense at its current state until judgment for damages is paid in full or until the vessels are sold for the purpose of fulfilling the judgment the court issues.

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. For the use of the 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.

Meanwhile, although Pride Keen had no involvement in the lease agreements, CPA argues that the company has been unjustly enriched as it owns the two vessels that have been docked on Saipan’s commercial docks for years, technically for free.