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Northern Marianas – The US Court of Appeals sides with Saipan casino commission on Imperial Palace’s license annulment

By - 30 June 2023

Saipan’s Commonwealth Casino Commission (CCC) has been given permission by the US Court of Appeals to revoke the casino license held by Imperial Pacific International for the Imperial Palace Saipan casino.

The matter will now move back to the District Court for further proceedings. Imperial Pacific had claimed that if it lost its license it would not be able to pursue arbitration proceedings with the Casino Commission, whereby it was highlighting how the pandemic that forced the casino to shut in March 2020 was a natural disaster, reffered to legally as force majeure defense.

“The District Court agreed with IPI, concluding that the plain language of the CLA provides IPI with a contractual right to assert a force majeure defense and therefore denying arbitration would deprive IPI of this defense. We disagree with the District Court’s conclusion. The CLA provides several venues in which IPI can raise a force majeure defense. IPI may raise a force majeure defense in a revocation proceeding before the commission, in an arbitration proceeding if the matter involves a covered ‘dispute’ under the CLA, or in a civil proceeding before the Commonwealth Superior Court.

“The District Court’s order enjoining the commission from proceeding with license revocation proceedings against IPI and mandating arbitration is reversed, and the matter is remanded to the District Court for proceedings consistent with this disposition.”

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