ON Aug. 25, the CNMI Supreme Court affirmed the suspension of Imperial Pacific International LLC’s exclusive casino license. The high court’s decision reverses the Superior Court in part, and orders the Commonwealth Casino Commission to hold further proceedings to determine new deadlines for some of IPI’s missed payments.
In April of 2021, CCC suspended IPI’s casino license after finding that IPI failed to make required payments and violated several other conditions of its license. After IPI challenged the agency’s decision, the CNMI Superior Court upheld its suspension.
In its opinion, the high court found that CCC made several errors, including a failure to apply an amendment to IPI’s license agreement, which gave it until 2025 to complete required Community Benefit Fund contributions.
The casino commission also overlooked IPI’s argument that the Covid-19 pandemic was a “force majeure” event. The high court wrote, “CCC’s imposition of penalties…was improper because the force majeure clause protects IPI from the consequences of default.” Under the Casino Licensing Agreement between IPI and the Commonwealth, IPI’s missed annual license fee payments remain due, but the casino commission must give IPI additional time to make those payments.
Lastly, the CNMI Supreme Court affirmed the fines and the suspension of IPI’s license that the casino commission imposed for failing to pay the casino regulatory fee and accounts payable over 89 days old, as well as IPI’s failure to maintain required cash or cash equivalents in a CNMI or United States bank. These violations carry a total penalty of $5 million in fines, and IPI’s license remains suspended until it complies with the casino commission’s order.
