THE legal counsels of the Office of the Governor and Imperial Pacific International will “meet and confer” anytime soon to resolve a dispute over IPI’s unpaid exclusive casino license fee.
Article 30 of the Casino License Agreement or CLA provides for a “dispute resolution process” between IPI and the CNMI government.
The Office of the Governor, through its legal counsel Brendan Layde, told IPI Director Howyo Chi that “representatives of the Commonwealth are prepared to meet and confer with IPI within ten working days of receipt of your letter to seek to clarify and resolve this issue.”
He was responding to Chi’s letter to Gov. Arnold I. Palacios dated Aug. 12, 2024, asking to “formally resolve” the license fee dispute “by following the dispute resolution process” outlined in the CLA’s Article 30.
Layde told Chi that the CNMI government’s preparedness to meet and confer is “subject to the [government’s] objections to your notice of presentation of dispute, and without waiver of any breach by IPI of the CLA’s dispute resolution process.”
The 10-day deadline to meet for the dispute resolution process was Thursday, Aug. 22, 2024. Chi said they received Layde’s response on Wednesday, Aug. 21, 2024. He said IPI’s attorneys will respond to Layde’s letter.
In his presentation of dispute, Chi told the governor that IPI takes the position that it is not liable for the annual license fees during the period when its license was suspended by the Commonwealth Casino Commission.
CCC suspended IPI’s license on April 22, 2021 due to the casino operator’s failure to pay the $15 million annual casino license fee and the $3.15 million regulatory fee. IPI’s casino ceased operation in March 2020 due to the Covid-19 pandemic.
Chi said based on their interpretation of the CLA, statutory provisions, and principles of equity and contract law, the suspension of IPI’s license “excuses” the casino operator from its payment obligation during the period.
Therefore, he said, the CNMI government’s demand that IPI pay for the casino license fee during the suspension of its license “is legally and equitably unjustifiable.”
During CCC’s monthly meeting on Thursday, the commission chairman, Edward C. Deleon Guerrero, said as of Aug. 12, 2024, IPI owed $77.5 million in annual license fee. He said by Oct. 1, 2024, IPI’s outstanding debt to CCC for the $3.15 million annual regulatory fee will reach $20.7 million.
Come October 2024, he added, IPI’s outstanding debt to the CNMI government will total $98.2 million.
