The US Court of Appeals has sided with an appeal filed by the Commonwealth Casino Commission (CCC) of Saipan against a prior US District Court ruling that prevented the regulatory body from revoking the Imperial Pacific International’s (IPI) operating permit in the Commonwealth of Northern Mariana Islands (CNMI).
According to reports in the Saipan Tribune, the matter has now been redirected to the US District Court for further proceedings, as the Court of Appeals ordered the lower court to reconsider its initial ruling after finding that it had made a mistake by siding with the casino company.
Imperial Pacific International had argued that a potential revocation of its CNMI casino license would make it impossible to seek further arbitration proceedings with Saipan’s Commonwealth Casino Commission via a force majeure defense. The casino company claimed that the Covid-19 pandemic, which forced the company to shut down its Imperial Palace Saipan casino in March 2020, could be categorized as a natural disaster.
For the time being, the casino license of the company remains suspended due to the casino operator’s failure to pay its annual licensing fees and other financial obligations worth more than $100 million.
Distcit Court Made an Error by Siding With the Casino Operator, Court of Appeals Says
As the US Court of Appeals order states, the US District Court sided with the casino and gambling operator, making a conclusion that the plain language of the corporate license agreement provided Imperial Pacific International with a contractual right to maintain a force majeure defense. Denying arbitration, in this case, would make it impossible for the company to defend itself. However, the CoA disagreed with the District Court’s conclusion and eventually ruled that the lower court erred in its decision.
As explained by the US Court of Appeals, the corporate license agreement of the gambling company offers several instances that can be used by Imperial Pacific International to raise a force majeure mitigation in a license revocation proceeding before Saipan’s gambling regulatory body, in a civil proceeding before the Superior Court of the Commonwealth, or in an arbitration proceeding in case a covered dispute under the aforementioned corporate license agreement is involved.
In its recent ruling, the US CoA explained that the District Court’s order instructed the commission to cease all the proceedings associated with Imperial Pacific International’s license revocation and reversed the mandated arbitration process. As a result of the Court of Appeal’s ruling, the matter is now remanded to the District Court for further proceedings to be held in line with the CoA ruling.
The Executive Director of the Commonwealth Casino Commission, Andrew Yeom, first started the pursuit of full revocation of the casino company’s operating permit after the license suspension order in April 2021. At the time, he filed a total of five complaints against Imperial Pacific International, accusing the gambling operator of failing to comply with some license agreement requirements that were specifically associated with the company’s failure to pay its annual license and regulatory fees in August and October 2020, respectively, and failure to make certain contributions it was supposed to.
