IPI gets 30-day notice to pay $62M

The Commonwealth Casino Commission board has given Imperial Pacific International (CNMI) LLC 30 days to pay the $62 million total in casino license fees it owes the CNMI government.

Shortly after the CCC board’s monthly meeting on Thursday, the board handed IPI the notice to pay the government within 30 days the total amount of casino license fees that remains unpaid in the last four years.

The notice of payment deadline was issued by CCC vice chair Rafael S. Demapan that day to IPI director Howyo Chi. CCC board chair 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 casino license fees is 30 days from receipt of the notice.

The casino license fee for each year is $15,502,570, for a total of $62,010,280 for the four-year period.

At 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 the 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 has ruled that 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 the force majeure event in its case is the COVID-19 pandemic that caused the company to close its casino.

During oral arguments 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 for [IPI] 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’s 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 in all.