Monday 16 September, 2019

UWP claim against Anthony in Grynberg affair debunked?

Saint Lucia continues to hold its ground at the International Centre for Settlements of Industrial Disputes (ICSID) in its oil exploration case against oilman Jack Grynberg and his RSM Corporation.

While the ICSID has yet to rule on the core part of the case, it has made some decisions on matters that have a bearing on the case itself, decisions that so far have been favourable to Saint Lucia, and which in one instance, has seemingly debunked previously held views by detractors of the former Prime Minister Dr Kenny Anthony.

A popular view by the United Workers Party, in and out of government, was that Dr Anthony was responsible for RSM taking Saint Lucia to the ICSID. Dr Anthony, in 2000, signed an Agreement with RSM to explore a certain portion of Saint Lucia’s seabed. He renewed the Agreement in 2004 for three years hereby giving the Agreement a life expectancy up to 2007.

RSM has charged Saint Lucia with breaching the Agreement saying in 2007 the Agreement was signed by the then prime minister, who in that case was Stephenson King.

This last renewal remains as controversial today as it was in 2007 in that King, in 2007, had denied renewing the Agreement and challenged anyone to prove that he did.

RSM instituted arbitrary proceedings against the Government of Saint Lucia at the ICSID in April 2012. The first decision that came out of the proceedings was in August 2014 when the ICSID’s Tribunal ruled on a request made by Saint Lucia which sought a provisional measure requiring RSM to post security for costs in the form of an irrevocable bank guarantee for USS 750,000 within 30 days of the decision, should the case go against RSM. The Tribunal ruled in favour of Saint Lucia.

Judge Nottingham in his judgement wrote that “in March 2004, the parties acknowledged the continuance of the boundary issues and agreed to an extension of the Agreement by another three years.”

Saint Lucia in December 2006 went through general elections. The United Workers Party, headed then by Sir John Compton, won and formed the new government. Sir John died the following year to be replaced as prime minister by Stephenson King.

The judge, in a summary of the case’s background, wrote that “after a change of the Government of Saint Lucia in 2006 and after a further replacement of Saint Lucia’s Prime Minister in 2007, an envelope was given to Earl Huntley on November 7, 2007, in the Prime Minister’s office. According to the Claimant (RSM Production Corporation) the envelope contained an agreement signed by the prime minister to the effect that the Agreement was extended by another three years.”

Noted the judge: “Mr. Huntley was, after collecting the envelope, called and asked to come back and give back the envelope which was not returned, neither to Mr. Huntley nor to Claimant (RSM Production Corporation).”

Judge Nottingham, who wrote the decision in that matter, noted that RSM Production Corporation argued there was continuance of the Agreement since it was signed in 2007 and that Saint Lucia should not negotiate with, nor grant to third parties any exploration rights in the same area of the seabed that they initially had a signed Agreement for.

The ICSID second decision was released on April 29 of this year and had to do with an annulment called by RSM. On December 15, 2014, RSM informed the Tribunal that it would be unable to provide a USD 750,000 bank guarantee or place that amount in escrow. On December 24, 2014, St Lucia filed a request for the discontinuation of the proceedings, to which RSM Production Corporation objected on January 5, 2015.

On April 8, 2015, the Tribunal issued a Decision on St Lucia’s request for suspension or discontinuation of proceedings (the “Vacatur Decision”) with assenting reasons from Judge Nottingham. The Tribunal directed that the vacatur will be lifted if RSM, within six months as of the date of this decision [that is by October 8, 2015], provides security for costs in the amount of US$750,000, as directed by the Security for Costs Decision as modified on August 20, 2014.

The Tribunal noted that should RSM default, Saint Lucia would then be granted leave to apply to the Tribunal for a final award for dismissal, with costs or such other orders as it may be advised. By letter of October 13, 2015, on behalf of the Tribunal, the Secretariat informed the Parties that the vacatur period, as ordered in the Vacatur Decision, expired on October 8, 2015, and that the Tribunal had noted that RSM did not provide the security for cost that was asked of it. On November 24, 2015, St Lucia filed a request for a final award. On February 9, 2016, RSM filed its reply to St Lucia’s request for a final award.

The Parties thereafter presented their submissions on costs and the Tribunal closed the proceedings on June 13, 2016. On July 15, 2016, the Tribunal rendered its Award. The Tribunal directed and ordered all RSM’s prayers for relief to be dismissed and fixed costs of the proceedings at US$ 615,670.25 with RSM ordered to bear all the costs of proceedings.

RSM was also ordered to reimburse Saint Lucia’s legal and other costs in the amount of US$291,153.76 plus interest at the rate of three months (London Interbank Offered Rate) plus 4% per annum from the notification of the Award until full and final payment. The court dismissed all further prayers for relief submitted by the Parties.

On November 12, 2016, ICSID received an Application for Annulment from RSM. The Application for Annulment was made within the time period provided in Article 52(2) of the ICSID Convention.

On November 15, 2018, a hearing on the Annulment was held in Washington, D.C. An ad hoc committee which was formed to hear the annulment said it was not convinced that ordering a provisional measure that required RSM to post security for costs constituted a manifest excess of power. It further rejected the claim for annulment under Article 52(1)(b) of the Convention.

The ad hoc Committee’s final decisions were that the Tribunal’s Award be partially annulled to the extent that RSM’s prayers for relief are dismissed with prejudice; 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, be borne on the basis of one third to be paid by St Lucia and two thirds by RSM with RSM bearing its own legal costs and expenses and one third of the legal costs and expenses of Saint Lucia.

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