NMI Federal Court Gives the Green Light to Imperial Pacific’s Request for Arbitration of CCC Dispute

The request filed by Imperial Pacific International LLC (IPI) for an arbitration to be allowed in the company’s dispute with the Commonwealth Casino Commission (CCC) regarding their license agreement has been granted by Chief Judge Ramona V. Manglona in the Northern Mariana Islands’ District Court. The Judge also granted the gambling operator’s request for a preliminary injunction against the local regulatory body.

On May 23rd, Imperial Pacific International asked the court to issue a temporary restraining order against the Commonwealth Casino Commission in order to prevent the regulator from organizing an enforcement hearing in the next two days. The hearing would seek to eventually revoke the exclusive casino license held by the gambling company.

Now, the Court granted the gambling operator’s motion for the abovementioned temporary restraining order.

In addition, Imperial Pacific International sought an order that would compel the regulator to take part in a non-binding arbitration with the American Arbitration Association (AAA) in line with Section 30 of the company’s casino license agreement. It also sought a preliminary injunction against the Commonwealth Casino Commission that would prevent it from going further with the revocation of the exclusive casino permit without engaging with arbitration first.

IPI Has the Right to Arbitrate Allegations Linked to Its Casino License Agreement’s Force Majeure Clause

Chief Judge Ramona V. Manglona issued a 21-page memorandum decision, after making clear that the court is given the authority to decide whether Imperial Pacific International refrained from its right to arbitrate following the casino license agreement. She clarified that if that was the case, the local gambling operator has not waived its right to seek arbitration to resolve the allegations in the 2021 complaints that are the subject of the aforementioned revocation hearing that would have been held by the Commonwealth Casino Commission in 2022.

According to the judge, the gambling company has to be permitted to arbitrate all disputes regarding the applicability of its force majeure defense to the allegations contained in the complaints originating from 2021. As mentioned above, she granted the operator’s motion for a preliminary injunction against the regulatory body, and she also granted the operator’s motion to force the watchdog to submit to arbitration in line with Section 30 of its casino license agreement.

In a court hearing that took place on August 24th, Judge Manglona noted that the Commonwealth Casino Commission’s previous decision to suspend the gambling operator’s license based on the 2020 complaints was not disturbed by her decision.

According to court findings, Imperial Pacific International has waived its right to arbitrate the allegations that were unveiled as part of the complaints that date back to 2020, it has not waived its right to arbitrate the allegations in the complaints that were unveiled in 2021. Judge Manglona further determined that a force majeure defense may be the focal point of the dispute resolution process included in aforementioned Section 30. She noted that if the force majeure defense is not allowed to go to arbitration, the force majeure provision included in Section 25 would be effectively annulled and deprived of meaning.

Previously, the gambling company and the regulator issued a joint report to the Northern Mariana Island’s federal court, stating that they reached a material agreement regarding the terms of a settlement and had been still negotiating on several terms of the agreement.