IPI receives CCC’s 30-day notice to pay $62M in casino license fees

The Commonwealth Casino Commission board handed over on Thursday to Imperial Pacific International (CNMI) LLC a notice to pay the government within 30 days the total amount due of $62 million in casino license fees.

Shortly after the CCC board’s monthly meeting on Thursday,

the board gave a copy of the notice of payment deadline issued

by vice chairman Rafael S. Demapan that day to IPI director

Howyo Chi. CCC board chairman Edward C. DeLeon Guerrero

recused from the case.

Chi said yesterday that they are still working on a response to

the notice.

The board determined that the reasonable deadline for IPI to

pay the 2020, 2021, 2022, and 2023 in annual casino license

fees is 30 days from receipt of the notice.

The casino license fee for each year is $15,502,570, or for a

total of $62,010,280 for the four-year period.

During the board’s regular monthly meeting last Oct. 26, the

board determined that a “reasonable deadline” for IPI to pay

the casino license fees is 30 calendar days from receipt of

notice.

Demapan stated in the notice issued on Thursday, a copy of

which was obtained by Saipan Tribune yesterday, that in

determining the reasonable time, the Commission considered

the CNMI Supreme Court’s ruling in CCC’s lawsuit against IPI.

Demapan noted that the high court ruled that the force

majeure provision in the Casino License Agreement excuses

any default in IPI’s payment during a force majeure event, but

not IPI’s obligation to pay.

Force majeure refers to an unforeseeable circumstance that

hinders a party from fulfilling its part in a contract. IPI claimed

that force majeure event in its case is the COVID-19

pandemic that caused the company to close down its casino.

At oral argument at the CNMI Supreme Court in January 2023,

IPI agreed that the COVID-19 force majeure event had ended.

Demapan said the high court determined that any lingering

effects of COVID-19 on IPI’s economic viability or ability to pay

does not constitute a force majeure event and is not excused

under the force majeure provision.

He said the Casino License Agreement references a

“reasonable period of time” in the context of license

suspension or revocation, stating that the Commonwealth may

not revoke or suspend the CLA unless it provides “an adequate

and reasonable period to licensee [IP] to cure the issue

identified.”

Demapan said many contracts provide a 30-day cure period for

monetary default to provide sufficient time for the party to

perform its obligation of making payment.

Demapan said 30 days is sufficient time for IPI to perform its

obligation of making the required payment.

CCC board chairman Edward C. DeLeon Guerrero stated during

Thursday’s meeting that including the annual casino license

fee and penalties for non-compliance with the CCC’s mandates, IPI now owes CCC and the government over $70 million.