THE U.S. Court of Appeals for the Ninth Circuit has issued a ruling in favor of the Commonwealth Casino Commission, reversing a previous federal court decision that stopped the regulatory agency from revoking Imperial Pacific International LLC’s casino license, and compelling CCC to arbitrate its dispute with the casino investor.
Circuit Judges Patrick Bumatay, Gabriel Patrick Sanchez and Bridget Bade issued the order on June 28, and reversed Chief Judge Ramona V. Manglona’s previous order enjoining the casino commission from proceeding with license revocation proceedings against IPI, and mandating arbitration.
The circuit judges also remanded the case to the District Court for the NMI.
“We disagree with the district court’s conclusion that the Casino License Agreement’s force majeure clause would be ‘effectively null[ified]’ if IPI is unable to submit its force majeure defense to arbitration in a revocation proceeding,” the circuit judges said. “The CLA provides several venues in which IPI can raise a force majeure defense. IPI may raise a force majeure defense in a revocation proceeding before the Commission, in an arbitration proceeding if the matter involves a covered ‘dispute’ under the CLA, or in a civil proceeding before the Commonwealth Superior Court,” the circuit judges added.
CCC, through Assistant Attorneys General Keisha Blaise and Alison Nelson, appealed Judge Manglona’s decision granting IPI’s preliminary injunction against the casino commission. She also allowed IPI to seek arbitration in its dispute with CCC regarding the Casino License Agreement and the casino developer’s force majeure defense.
IPI is represented by attorneys Kevin Abikoff and Samuel Salyer.
The arbitration, which cost the CNMI government $350,000, was held in Honolulu, Hawaii on May 23, 24 and 25, 2023, and was presided by Thomas J. Brewer of the American Arbitration Association.
The casino commission has also petitioned the CNMI Superior Court to enforce its decision to suspend IPI’s exclusive casino license for its failure to pay the community benefit fund, the casino annual license fee and regulatory fee.
On May 31, 2023, the commission said IPI owed the CNMI government over $46 million in exclusive license fee and over $9 million in regulatory fee, for a total of over $56 million. IPI had been three years delinquent in paying the $15 million annual license fee and the $3.15 million annual regulatory fee, the commission added.
Following the implementation of Covid-19 restrictions in March 2020, IPI ceased its hotel-casino operations.
