Lee-Chin wins US court confirmation of DR arbitration award

A US federal court has confirmed a US$43.7-million arbitration award in favour of Jamaican-Canadian investor Michael Lee-Chin, rejecting the Dominican Republic’s bid to overturn the ruling.

US District Judge Colleen Kollar-Kotelly of the District of Columbia issued the decision last month, siding with Lee-Chin after the Dominican Republic asked the court to throw out the award. The court said it would adopt “Magistrate Judge Faruqui’s well-reasoned report and recommendation in full”.

The dispute originated in 2007, when a Dominican municipality contracted with Lajun Corporation — a US-registered company – to manage a landfill. Lajun failed to meet its obligations between 2007 and 2013, according to court documents. Lee-Chin acquired an indirect 90 per cent interest in Lajun and the underlying land in 2013, but disputes continued. In 2017, the Dominican Republic cancelled the landfill agreement and initiated proceedings to have it declared void, winning an administrative ruling from the country’s authorities in 2018.

Lee-Chin then took the matter to international arbitration under CAFTA-DR — the Dominican Republic-Central America-United States Free Trade Agreement — which protects qualifying investors from expropriation, unfair treatment, and arbitrary measures by signatory governments. The case was heard by ICSID, the World Bank’s investment dispute body, whose awards are enforceable in US federal courts under American law.

In October 2023, the arbitration panel found that the Dominican Republic had unlawfully seized Lee-Chin’s investment and treated him unfairly, awarding him US$38.7 million for the seizure, US$4.9 million for the treaty breach, and US$133,857 in costs and fees.

The Dominican Republic then sought to have the award thrown out in US federal court, arguing that the arbitrators lacked authority, made procedural errors, and miscalculated damages. The court rejected each argument.

“The court agrees with Magistrate Judge Faruqui’s finding that the parties agreed to have the arbitral tribunal determine the arbitrability of Lee-Chin’s claims,” the ruling stated, adding that “the award should not be vacated.”

The court denied Lee-Chin’s request to have the Dominican Republic cover his legal fees.

business@gleanerjm.com