The Gleaner | 8 October 2023
Millions awarded to Lee-Chin in dispute with Dominican Republic
Jamaican business mogul Michael Lee-Chin has been awarded more than US$43 million in an investment dispute with the Dominican Republic.
Lee-Chin obtained a Final Award from a UNCITRAL Arbitral Tribunal in the case that involved issues of first impression under the CARICOM-DR Free Trade Agreement (Treaty).
Lee-Chin had brought the claim against the Dominican Republic under the treaty in relation to his interest in Lajun Corporation SA, a Dominican company, which held a long-term concession contract to manage a landfill in Santo Domingo.
The concession was managed by Lee-Chin’s son, Adrian Christopher Lee-Chin, who served as Lajun’s general manager.
In 2017, the Dominican Republic took military control of the landfill and also brought local actions to nullify and terminate the concession, based on an alleged environmental emergency.
Lee-Chin initiated investment arbitration against the Dominican Republic as a result of what he alleged was the state’s multiple violations of the treaty, which included various arbitrary acts intended to force him to operate the landfill without receiving a fair tipping fee.
After more than five years of arbitral proceedings, multiple rounds of substantive briefs (jurisdictional and merits), two document production phases, a two-day jurisdictional hearing, a six-day final hearing on the merits, and significant post-hearing briefings, the arbitral tribunal issued its final award in favour of Lee-Chin last week.
In the final award, the tribunal found that the Dominican Republic violated its obligations under the treaty regarding expropriation and fair and equitable treatment, as well as breached the treaty’s umbrella clause. In reparation for these violations, the arbitral tribunal ordered the Dominican Republic to pay Lee-Chin a sum in excess of US$43.59 million, plus interest.
Agreeing with the arguments made by Lee-Chin, the tribunal rejected all remaining jurisdictional objections filed by the Dominican Republic, and held that “the termination of the Concession Agreement was part of a larger effort by the State to actually eject Claimant from the operation of the investment.”
The tribunal further found that “no pattern of reasonableness or plausible justifications may be discerned in [the Dominican Republic’s] changing attitudes throughout the investment”.
Consequently, the arbitral tribunal concluded that the Dominican Republic “must compensate Claimant for the damages it actually caused as a result of violating its obligations under the terms of the Treaty”.
Upon review of the final award, Lee-Chin said he “was very pleased with the result and that he was finally vindicated”.
He added that he, “expects the Dominican Republic to immediately satisfy the Final Award and evidence to the investor community, including all Jamaican investors, that the Dominican Republic once found liable, and honors its international obligations”.