By: Staff Writer
July 16, 2021
A major developer in Grenada was given the go ahead for World Bank arbitration against the Mitchell administration over the Kimpton Kawana Bay Resort debacle.
True Blue Development (TBD), the development company owned by former Grenadian Ambassador to Florida, Warren Newfield, in a statement to Caribbean Magazine Plus, wrote that the World Bank Investor Tribunal ICSID “Accepts and Registers International Arbitration Proceeding by True Blue Development Against Government of Grenada Over Kimpton Kawana Bay Resort.
“True Blue Development Limited, developer of Grenada’s Kimpton Kawana Bay resort, has had its arbitration case against the Government of Grenada accepted and registered by the International Centre for Settlement of Investment Disputes (ICSID). Washington-based ICSID is an arm of the World Bank devoted to resolving international investment disputes against sovereign states.
Mr Newfield said about the recent developments: “As heart-breaking and perplexing as I find the government’s turnabout on Kimpton Kawana Bay, we have worked diligently to meet all our obligations, while the Government of Grenada has been deceitful. We look forward to the opportunity to prove the Government of Grenada’s broken promises in the now registered arbitration proceedings.”
The statement also continued, “Despite the Grenada government’s effort to block its registration, the ICSID claim with case number ARB/21/37 will proceed. The government will have an obligation to comply with any ICSID ruling from the arbitration proceedings, which is regarded as a tribunal of final resort in sovereign investment disputes.”
Mr Newfield has accused the Grenadian Prime Minister Dr Keith Mitchell of trying to squeeze his project to death by putting up roadblocks to stop the progress of the development.
Dr Mitchell has also levied allegations that Mr Newfield was improperly trying to use government funds for the Kawana Bay project and was not following the Citizenship by Investment (CBI) protocols by having the adequate amount of money in an escrow account as prescribed by the law and as such Newfield and TBD did not have the money to complete the project.
Newfield and TDB have denied Prime Minister Mitchell’s claims and said that Mitchell was being anti-business and further said that TBD has an investment contract in place with the government for the development of the Kimpton Kawana Bay project, pursuant to which the government of Grenada authorized TBD to sell $99m worth of real estate assets through Grenada’s CBI program.
True Blue and its investors are represented by law firm BakerHostetler, led by head of its International Arbitration and Litigation team, Mark Cymrot, who has successfully brought numerous investor-state disputes before ICSID.
“The Government of Grenada has not been candid about its motive for the senseless destruction of the five-star resort project that, even before its completion, has been bringing substantial benefits to the Grenada economy in terms of jobs and opportunity. The Government of Grenada has much it cannot explain and we are looking forward to presenting our full case before the ICSID tribunal,” said Mr. Cymrot.
They also assert that it was the government that arbitrarily withdrew its authorization for the Kimpton Kawana Bay project budget, thereby breaching its contractual obligations and international treaty obligations to True Blue Development.
TBD’s statement also said: “True Blue’s independent auditor confirms that all proceeds from investor sales at Kimpton Kawana Bay have been used solely for development of project; the Grenadian government continues to unlawfully obstruct the application process for qualified CBI investors
“True Blue asserts that the arbitrary and unlawful conduct of the Government of Grenada has thwarted the successful completion of the 5-star luxury Kimpton Kawana Bay resort on the island, which the government approved in 2017 and lauded as recently as October 2020 as a vital economic development project on the island nation.
Construction at the project was already at an advanced stage, when last December the Grenadian government started a “surreptitious, multi-front effort to squeeze the project into failure,” according to the ICSID notice for arbitration filed by True Blue and the other claimants.
TBD also said: “The official registration of the ICSID filing reflects the essential need to protect investors in Kimpton Kawana Bay from what True Blue and the other claimants say is a concerted scheme by the government to block completion of this world-class resort, which already has more than 92 percent of condominium units spoken for, either through outright purchase or by confirmed reservation.
“In addition, the Government of Grenada has persisted in its senseless decision to halt approvals of CBI applications by CBI investors in Kimpton Kawana Bay, despite accepting money from such CBI investors for the processing of their CBI applications. There is no legal basis for such prejudicial actions and it points to something rotten within government. The Government of Grenada continues to show no regard for the rule of law.
“In the normal course of True Blue’s business operations, True Blue is pleased to report that its independent auditor PKF has completed its audit of the financial statements of True Blue and the Kimpton Kawana Bay project up until the end of April 2021. In an extract of a letter from PKF regarding the results of the routine audit, TBD cleared up the expenditure to date for the project and said that all CBI proceeds received by the project have been spent on the development of the project property, assets and related expenditure to progress the project; No expenditure of a personal nature, misappropriation of funds or unsupported expenditure were noted in course of PKF’s audit procedures; No management fees were paid to the developer; and no dividends were paid to its shareholders.
The arbitration request has been made under a binding 1986 Treaty between the United States and Grenada Concerning Reciprocal Encouragement and Protection of Investment.