The U.S. District Court for the NMI has granted Imperial Pacific International (CNMI) LLC’s request for a temporary restraining order prohibiting the Commonwealth Casino Commission from moving forward with its revocation hearing today to decide whether or not to revoke the casino investor’s exclusive casino license.
IPI and its sister company, Best Sunshine International Ltd., asked the federal court yesterday for preliminary injunctive relief that sought to preserve the status quo or prohibit the CCC from pursuing the revocation of IPI’s license, pending a determination of the parties’ rights and liabilities by an arbitral tribunal—defined as a panel of one or more adjudicators tasked to resolve a dispute between two parties through arbitration.
IPI and Best Sunshine also sought a temporary restraining order to temporarily suspend the CCC’s revocation hearing that was set to begin today.
Chief Judge Ramona Manglona granted IPI’s requested TRO around 5pm yesterday, stopping the CCC from proceeding with the revocation process.
One of the main reasons the TRO was granted, Manglona said, was that the potential harm to IPI and Best Sunshgine should the court decline their motion for a TRO greatly outweighs any harm that the CCC may incur.
Manglona noted that the plaintiffs anticipate receiving $150 million in financing before the end of May to make payments due to the Commonwealth Casino Commission and other creditors and to resume its operations.
“Any revocation of IPI’s license following the CCC’s hearing scheduled for May 24, 25 puts [IPI] at risk of this much needed capital infusion. Therefore the balance of hardships tips decidedly in plaintiffs’ favor,” the order stated.
In addition, Manglona said, plaintiffs have raised serious questions going to the merits of requiring arbitration pursuant to the Casino License Agreement.
Manglona also stated in her order that if the court declines to grant a temporary restraining order, plaintiffs will incur immediate and irreparable injury because plaintiffs will be deprived of their contractual right to assert a force majeure defense of the Casino License Agreement and a procedural right to the dispute resolution process that allows for arbitration and the opportunity to submit the arbitrator’s decision to the Commonwealth Superior Court.
Lastly, the public interest would be served by the issuance of a temporary restraining order, she said.
According to Saipan Tribune archives, CCC is seeking the complete revocation of IPI’s license because it has failed to comply with the requirement to lift its suspension, like paying over $30 million in fees.
“They are technically legally suspended by the CCC, and it has been upheld by the CNMI Superior Court. Now, they’re challenging us in Supreme Court for the suspension order. Now, while that’s in play, I’m seeking revocation. This is a further action to the suspension because they couldn’t remedy the suspension order. When we suspended them, we said, ‘You need to pay all the regulatory fees, the casino license fee, and we need you to pay that immediately to [lift] your suspension’ but that hasn’t happened. That’s why I filed five more enforcement actions against them, because they did not live up to the suspension order,” said CCC executive director Andrew Yeom in a previous interview.
IPI’s exclusive license was suspended back in May 2021 and the casino operator was given six months to pay both the $15.5 million casino license fee, the $3.1 million regulatory fee, and a $6.6 million fine to lift the suspension.