Sunday 26 May, 2019

Office of the Prime Minister: Update on Grynberg Matter  

As most Saint Lucians are aware the Government of Saint Lucia has been embroiled in litigation with RSM Production Corporation (RSM) and its principal Jack Grynberg over the exploration rights to our seabed. The issue dates back to a decision made by former Prime Minister Dr. Kenny D. Anthony to execute an agreement with RSM in 2000. Nearly twenty years later, and after the application of significant State resources, this matter remains unresolved.

The Government recognizes the importance of keeping the public updated on this matter of national interest and wishes to advise, as follows:

- Correspondence on the Government’s files, dated 1st February 2000 reveals that Attorney General, Petrus Compton, advised Dr. Kenny D. Anthony that the State would be better served by having a “specialist in petroleum law” to review the proposed arrangement between RSM and the Government. He further advised that there were matters in the agreement to be considered that “can only be properly appreciated by one familiar with the industry, its standards and practices.”

- There is no evidence that this expert in petroleum law was engaged by the then Prime Minister. However, in March 2000, a contract was signed by Jack Grynberg on behalf of RSM and by Dr. Kenny D. Anthony on behalf of the Government of Saint Lucia. The arrangement centered on oil exploration of over eight million acres of the Saint Lucia’s seabed.

- Six months after the signing, RSM registered a formal complaint to Dr. Anthony about outstanding boundary disputes which the company claimed had prevented it from fulfilling its contractual obligations. Dr. Anthony’s response was to increase the acreage for exploration, as well as grant an extension of the term of the contract.

- In April 2012 the Kenny Anthony Administration acknowledged that the company owned by Jack Grynberg instituted arbitration proceedings against the Government of Saint Lucia in respect of the exploration license which was granted to his company in 2000. Since that date the matter has been before the International Center for Settlement of Investment Disputes (ICSID).

- RSM failed to comply with an order of the Tribunal to place in a special account US$750,000.00 as security for costs. As a consequence of this the Tribunal dismissed RSM’s case against the government—with prejudice. In response to this ruling, RSM appealed the decision before the Tribunal’s ad hoc committee.

- In April 2019 the ad hoc committee ruled as follows:

“(1) The Tribunal’s Award is partially annulled to the extent that it concludes in Paragraph 184(i) that RSM’s prayers for relief are dismissed with prejudice.

(2) The costs covering the ad hoc Committee Members’ fees and expenses, the ICSID administrative fees and other direct expenses, as determined by the ICSID Secretariat, shall be borne on the basis of one third to be paid by St. Lucia and two thirds by RSM.

(3) RSM shall bear its own legal costs and expenses and one third of the legal costs and expenses of St. Lucia.”

- The effect of this decision is that it clears the way for the matter to be determined on its merits.

- Our records reflect that approximately USD$2 Million (EC$5.4 Million) has already been spent in our defense against the USD$500,000,000.00 Claim brought by Jack Grynberg’s company.

This Administration wants to assure all citizens that we are committed to regaining control of our seabed and will advise of any significant developments in this long outstanding matter.

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