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Dom Rep challenges international panel’s jurisdiction over fight with Lee-Chin

Published:Monday | November 19, 2018 | 12:00 AMAvia Collinder/ Business Reporter
Regional investor Michael Lee-Chin.

Dominican Republic is challenging the jurisdiction of an arbitration panel to hear the dispute with regional investor Michael Lee-Chin, who has accused the government of "unlawful expropriation of multimillion-dollar investments" in that country.

On November 9, in the latest face-off at the International Centre for Settlement of Investment Disputes the (ICSID), the arbitrators agreed to a review of Dom Rep's request for 'bifurcation', or removal from the dispute body's jurisdiction. ICSID is a department of the World Bank.

"You will note that the Dominican Republic intends to seek to bifurcate jurisdiction from the merits as the Dominican Republic contends that the tribunal lacks jurisdiction to hear the case," said Lee Chin's legal representative Richard Lorenzo.

But Lee-Chin was more forthright, citing the developments as reason for investors to be wary of putting their funds into that country.

"The Dominican government is now taking the position that investors are not protected under the CARICOM agreement it signed with Jamaica to protect investors. Jamaican and CARICOM investors have no protection when they invest in the DR," the investor told the Financial Gleaner.

Lee-Chin first served the government of the Dominican Republic with a notice of arbitration on April 6, 2018 surrounding the takeover of a recycling facility and waste-to-energy plant in which he invested in 2013.

He is claiming damages of more than US$300 million, he said.

Through the investment and subsequent agreements, Lee-Chin obtained a concession to operate, administer, and maintain a sanitary landfill in the Dominican Republic for a period of 27 years. Dom Rep reportedly removed company representatives from the landfill in 2017, and thereafter assumed control of the landfill's administration and operation.

Notwithstanding that the treaty "expressly contemplates" that disputes with an investor are subject to international arbitration, among other dispute resolution alternatives, "the Dominican Republic has taken the position that it did not consent to arbitrate under the treaty," said Lee-Chin.

"The Dominican Republic seeks to deny [me] the rights and protections granted to foreign investors under the treaty," he charged.

Lorenzo said the ICSID arbitrators would make their decision on the jurisdictional challenge in the coming year. Dom Rep officials and legal representatives did not respond to requests for comment.