Jack Grynberg wins on appeal: ‘Dismissed’ case against Saint Lucia back on track!

Even as some suspect somnambulists continue to pronounce dead the mystery commonly referred to as Grynberg, in the realm of reality the opposite remains true: According to information accessible on the website of the International Center for Settlement of Investment Disputes, the Texas-based RSM via its CEO Jack Grynberg entered into an arrangement signed by Kenny Anthony in the name of Saint Lucia on 29 March 2000. But not until close to a decade later did that fact come to light. So close to his bosom did the day’s prime minister hold the contract that not even members of his Cabinet had a clue about it.

It turned out that Earl Huntley, then a public servant, had in his private capacity alerted the oilman to the possible presence of oil under the sea at Dauphin. After Jack Grynberg confirmed Huntley’s conviction that a yucky substance that had clung to his foot while swimming in the area was indeed Texas tea, Huntley arranged a secret meeting with Prime Minister Kenny Anthony that culminated in the earlier mentioned contract. In the telling of Dame Pearlette Louisy, not even the nation’s governor general, the only official legally authorized to issue exploration licenses in Saint Lucia, was informed of the agreement.

A short time earlier RSM had entered into a similar arrangement with the government of Grenada that finally required the intervention of the ICSID, at great cost to the island’s government and people. The Saint Lucia arrangement never got very far. Mere months after its inking RSM notified the prime minister that he could not properly honor his end of the bargain until certain border disputes with uncooperative sister islands were settled.

In the meantime he requested and was granted by Kenny Anthony without a word to his Cabinet, the day’s House opposition or the governor general, an extension to their contract and additional acreage for exploration. In 2006 the Kenny Anthony administration was voted out of office and replaced by an ailing Sir John Compton. Following his passing in early 2007, and without evidentiary support, Jack Grynberg’s local “associates” claimed Compton had promised to discuss with his Cabinet certain matters relating to the RSM contract, reportedly due to expire the year Compton died.

No correspondence has ever surfaced that might’ve indicated the prime minister ever had any knowledge of a government contract with RSM. There was nothing in the government’s files to suggest what may have transpired between Kenny Anthony and Jack Grynberg in the presence of oil finder Huntley. Not even that the prime minister and the oilman had ever been introduced. The sole keeper of documents relating to the arrangement has never produced proof of his communication with Compton in relation to that fateful day he serendipitously discovered oil under the Dauphin seabed.

Shortly before the 2011 general elections Prime Minister Stephenson King informed RSM by letter of his government’s intention to put up for bids the area referred to in the company’s 2000 agreement. King informed Grynberg that he considered his 2000 arrangement “expired,” and invited him to get to take the line and bid with other interested oil explorers. Grynberg’s response was a warning to King that the force majeure clause in his contract kept it alive and that if the prime minister dared to carry out his plan the billionaire oilman would sue for breach of contract. The Kenny Anthony government that had initiated the relationship was back in office when RSM carried out its threat.

According to its records, the ICSID received on 30 March 2012 “a request for arbitration from RSM against Saint Lucia.” A 20 April release from the office of the prime minister confirmed RSM’s action. Also that on 10 April 2008 the King government had taken the position that the agreement had expired and had “subsequently reportedly taken steps to put the agreement area which RSM has the right to explore, to competitive bidding.”

On 6 September 2013 lawyers representing the government filed a request requiring RSM to post security in the form of “an irrevocable bank guarantee of US$750,000”; also an order requiring RSM to pay “all costs advances during the pendency of the arbitration.” Three months later the tribunal ordered RSM to pay “all costs and advances” and adjourned the request that RSM post US$750,000 security for costs. On 13 August 2014 the tribunal directed RSM to post that security within 30 days of the decision.

Back on the ranch on 14 August the prime minister’s office issued a release headed “St. Lucia Wins Another Round In the On-Going Arbitration Case with Jack Grynberg’s Company.” The memo cited a December 12, 2013 order by the ICSID that RSM pay all the advances toward the administration costs of the arbitration “which in all previous known cases have been paid 50% by each party.” Meanwhile the tribunal had warned RSM that if the company failed to cough up the US$750,000 dire consequences would follow. 

On 8 April 2015 the tribunal declared that RSM’s complaint would be set aside until the company had complied with the costs order. RSM was given six months to provide the security for costs, in default of which “the respondent is granted leave to apply to the tribunal for a final award of dismissal.” All other procedural requests were off the table. RSM appealed. On 15 November, 2018 there was a meeting in Washington D.C. of a so-called “ad hoc committee” with the discretion to annul an award or not, having considered “all relevant circumstances including the gravity of the circumstances which constitute the ground for annulment and whether these circumstances had, or could have had, a material effect upon the outcome of the case.”

The committee recalled that there were “three stages involved in the process that led to the tribunal’s ultimate decision to discontinue the proceedings. First, an order was made by the tribunal for security of costs, with RSM given 30 days to comply. Second, in the face of the failure of RSM to provide such security there was a decision by the tribunal suspending the proceedings for six months. Third, following the six-month period when it was clear RSM was refusing to provide security for costs, the award was issued by the tribunal discontinuing the proceedings with prejudice.”

Moreover: “In the view of the committee, while the decision to discontinue the proceedings for failure to provide securities . . . is within the power of a tribunal under Article 44 . . . a decision to dismiss the claims with prejudice takes on a different character. Such a decision prevents the claim from being reintroduced at a later stage. Dismissing a claim with prejudice is the same as concluding the claim has no merit.

This cannot be a matter of procedure . . . This is not just a procedural matter affecting this case: it is a substantive matter affecting the merits of the case and the rights of RSM to pursue its claims. It is not just about preventing a claimant from continuing proceedings in which it has failed to provide security costs. It is about ending a case on its merits . . . nor is there any other basis in the ICSID Convention for a tribunal to dismiss a case on the merits without having heard arguments on the merits.”

While the committee concluded the tribunal was not per se manifestly exceeding its powers by discontinuing the proceedings, “it was manifestly exceeding its powers by dismissing the proceedings—‘with prejudice!’ ” Finally the committee supported RSM’s right to have the company’s case against Saint Lucia heard on its merits. As for all fees and expenses, they will now be borne, at the committee’s direction, by both parties; not just by Jack Grynberg: two thirds must be paid by RSM and one third by Saint Lucia.

There has been no further word from Prime Minister Allen Chastanet, following his promise several months ago to initiate an investigation into the events that landed Saint Lucia before the ICSID in the first place. Nearly twenty years after the secret signing, there has been no official word on the matter. Kenny Anthony has ignored requests by prime ministers King and Allen Chastanet. At the time the last mentioned announced his intention to investigate the issue, his immediate predecessor, Kenny Anthony, threatened that if Chastanet initiated an investigation the MP for Vieux Fort South would “make sure you reap the whirlwind!” 

So far the Grynberg case has cost local taxpayers close to EC$4 million. In his suit, yet to be heard, the billionaire oilman is seeking damages in the sum of US$500 million. Clearly this matter won’t be over until the fat man sings!