In 2011, several weeks after three incumbent United Workers Party MPs had confirmed its existence, the then leader of the opposition Kenny Anthony publicly acknowledged for the very first time a 10-year-old agreement between the government of Saint Lucia and Denver billionaire oilman Jack Grynberg.
While claiming the previously unheard of contract had expired in 2007, Anthony added: “The only issue the present government has to resolve is whether the license to determine whether oil exists in our waters was extended. The government retains its power to renew or not to renew. Grynberg Petroleum has argued that it should be extended, that certain acts of God normally referred to by lawyers as ‘force majeure’ prevented Grynberg Petroleum from completing the work it has commenced. Grynberg Petroleum has not sued the government of Saint Lucia. In any event if it did, it would not succeed because of the Grenada precedent. Indeed, because of the decision in the Grenada case, there never was any need to obtain a legal opinion from an American firm, as done by the government. It was a colossal waste of money.”
Famous last words? Lest we forget, the recalled discombobulating declaration was by a man who in private life is a much-advertised constitutional law specialist. For many years he had lectured students throughout the region. How perplexing, then, to hear him describe as “a colossal waste of money” the 2011 government’s efforts to establish the legal status of a contract Anthony had signed in relative secrecy more than a decade earlier, when he was the nation’s prime minister. A contract, let us not forget, that in the professional opinion of his own attorney general Petrus Compton could be “properly appreciated” only by “a specialist petroleum lawyer familiar with the industry, its standards and practises,” alas, an “obvious deficiency within the AG’s chambers.”
It should also be remembered that at the time of the opposition leader’s announcement the King government was operating in the dark, largely uninformed about the subject at hand, details of which were shared only by Kenny Anthony, Jack Grynberg and Earl Huntley, the foreign affairs permanent secretary and all things Grynberg. His serendipitous discovery of oil while swimming in the sea at Dauphin had led him to introduce the island’s prime minister to his friend “Jack”—a billionaire oilman from Denver, Colorado.
How interesting that the constitutional lawyer Kenny Anthony had referred to force majeure as “acts of God.” Force majeure is actually French for “superior force.” Also, “irresistible force.” While such forces might well include “acts of God”—storms, earthquakes, tsunamis, landslides and other seismic phenomena—force majeure also embraces man-made activity, acts of parliament and other impersonal events or occurrences.
More to the point, force majeure is a standard clause found in construction and supply contracts that exempts the contracting parties from fulfilling their contractual obligations for causes that could not be anticipated, causes beyond their control. Grynberg’s force majeure claims were never related to “acts of God.” Always he had blamed unresolved man-made “border disputes” for his failure to deliver on his contracts with the governments of Grenada and Saint Lucia.
In all events, and notwithstanding the then opposition leader’s contrary public pronouncement, Grynberg had quite predictably sued the government of Saint Lucia, with the recently reelected Kenny Anthony once again at its helm. It will now be up to a special tribunal, not to the defendant or his surrogates, to determine the relevance of the Grenada precedent. One thing for certain, it will cost the people of Saint Lucia a “colossal” amount of money precisely when they can least afford more wastage!
As leader of the opposition Kenny Anthony had also referred to the oilman’s suit against Grenada, settled by the ICSID in 2000—the same year Grynberg entered into his agreement with the Saint Lucia government. In his only address on the subject, this is what Anthony said: “The government of Grenada decided not to renew or extend an exploration license to Grynberg Petroleum. The company sued, argued the same ground of force majeure which it has raised in Saint Lucia. In fact, Grynberg Petroleum lost to Grenada. The same principle applies to the interpretation of the government of Saint Lucia. So it is ingenuous to say that Saint Lucia is disadvantaged by any binding license for an extended period of years. If Grynberg is a con artist, then why was his contract renewed in Saint Vincent?”
Better to ask why in the first place Saint Lucia had entered into an agreement with Grynberg and then twice extended it, despite his relationship with our sister island. The instructive truth is that the billionaire oilman’s suit centered on the Grenada government’s refusal to issue him a license to which, he claimed, his contract entitled him. Grynberg lost, on the simple ground that he had waited four years after signing his agreement to apply for the all-important exploration license.
The agreement required him to apply to the appropriate authority within 90 days of signing. His force majeure claims had nothing to do with the outcome. Interesting to note, Grynberg had invoked the force majeure clause just two weeks after signing the 1996 Grenada agreement!
In the case of Saint Lucia, the oilman invoked force majeure just six months after he and Kenny Anthony signed their agreement which states at Article 3: “The government hereby grants the company an exploration license covering its interest in the agreement area for an initial term of four years from the effective date, subject, however, to the force majeure provisions of Article 24.” (My italics)
Grynberg has now sued the Saint Lucia government for breach of contract, on the alleged basis it had taken “the position that the agreement had expired.” Moreover, that the government had “reportedly taken steps to put the agreement area, which only RSM has the right to explore, to competitive bidding.” A totally different claim from that involving Grenada, which, as earlier stated, was over the government’s refusal to grant a promised exploration license.
As noted several times in previous articles I’ve written on the subject, Article 3 of the St. Vincent agreement requires that “as soon as possible, but in no event later than 90 days after the effective date, the company shall apply for, and the minister, under and in accordance with the Act, will grant to the company an exploration license . . .” So does Article 3 of the Grenada agreement.
“The Act” refers to the Petroleum and Natural Gas Deposits Act 1989 that “makes provision with respect to exploring for and producing petroleum . . . subject to certain limitations and conditions, authorizes the minister to grant exploration licenses and development licenses . . .”
In Saint Lucia, and in accordance with the Minerals (Vesting) Act, the issuing authority is the governor general, in the instance acting in her own deliberate judgment, not “on the advice of the prime minister.”
It is worth repeating that Article 3 of the initial draft agreement presented by Grynberg to the government of Saint Lucia was similar to those of St. Vincent and Grenada. There has been no official explanation for the discrepancy that permitted this island’s prime minister to issue a license in apparent contravention of the Minerals (Vesting) Act.
Grynberg had done no exploratory work when in September 2000 the prime minister consented to a contractual amendment that effectively enlarged the area to be explored. In March 2004, Grynberg successfully presented a second amendment that extended the exploratory period for a further three years, to March 2007.
Despite the cited amendments referred to the force majeure provision that “all of RSM’s obligations are suspended until all boundaries are resolved,” the prime minister ratified them, evidently without question. It would appear that by obtaining an extension of the exploratory period the contracted option to extend for two consecutive 2-year terms is preserved. It certainly saved Grynberg from having to deliver on his undertaking to expend US$3 million for the drilling of one well during the first two-year extension period!
This was how Kenny Anthony recalled the situation back in 2011: “After an initial four-year period, the license was renewed for a further two years and thereafter for an additional year ending in 2007.” Not according to documents I have perused that indicate both amendments involved 3-year extensions. As for the quoted “after an initial four-year period,” official documents indicate the first extension was given just six months into the life of the four-year agreement, despite that no work had been done, despite that Grynberg had invoked force majeure.
In a letter dated 21 May 2011 to a local newspaper, the Dominican lawyer Anthony Astaphan, SC again came to Kenny Anthony’s defense following public reaction to his Grynberg-related statements: “Dr. Anthony, Earl Huntley and others have said that the Grynberg agreement was to expire or ought to have expired in 2007. If this is so [Richard] Frederick and the government of Saint Lucia have an unconditional obligation to disclose the agreement and all relevant and related correspondence. Why? Because the people ought to know whether the Grynberg agreement was extended in 2007, after Dr. Anthony was back in his law firm, by the United Workers Party either by neglect and failure to act or, by the deliberate act of renewal by the minister of government.”
And what if both Dr. Anthony and Earl Huntley were misinformed? What if
both had suffered memory lapses?
“In any event,” Astaphan went on, “the suggestion by Frederick and others that say the Grynberg issue will cost Saint Lucians millions of dollars in legal fees should the government seek to terminate the agreement is, certainly in view of the significant Grynberg losses at the arbitration and courts of the USA, utter and absolute nonsense. These rulings are now judicial precedents and are binding. Therefore, they have made and ought to make life much simpler for the government of Saint Lucia if it intends to review the Grynberg agreement.”
Not a word about the fees incurred by the Grenada government. Presumably, Mr. Astaphan stands ready to defend Saint Lucia pro bono, bearing in mind the worsening state of our economy!
Not to be outdone, Earl Huntley, the well-known diviner of oil under the sea at Dauphin had also written on the issue.
In a newspaper article, he asks: “Why would the [King] government, which does not have a dispute with Grynberg, want to end the agreement with him, at considerable cost to the government . . . It is possible that Jack Grynberg’s love of litigation to redress what he considers wrongs and injustices, whether practiced by oil companies and rivals or government officials, has frightened some people. But it also seems that Richard Frederick’s attempt to discredit and denigrate all those who have so far been involved in the Dauphin oil project is an effort by his government to claim credit for discovering that Saint Lucia has energy resources . . .”
No matter, if the people must pay for the return of the Saint Lucia seabed to local control, it seems only fair they should know as soon as possible how in the first place it got into Grynberg’s grip and has remained there for the last twelve years. I fully support Anthony Astaphan’s appeal to the prime minister to make known the secret details of the Grynberg contract. It’s about time! How interesting that the constitutional lawyer
Kenny Anthony had referred to force majeure as
“acts of God.” Force majeure is actually French for
“superior force.” Also, “irresistible force.” While such forces might well include “acts of God”—storms, earthquakes, tsunamis, landslides and other seismic phenomena—force majeure also embraces
man-made activity, acts of parliament and other impersonal events or occurrences.