Every time the Dominican Republic stubbornly refuses to concede in its legal battle with NCB Chairman Michael Lee Chin, it comes out on the losing side.

On February 29, 2024, a Tribunal dismissed the Dominican Republic’s Request for Rectification of the Final Award filed by the Respondent (who is the state of the Dominican Republic) in its entirety.

What does that mean?

The Dominican Republic will have to pay Lee-Chin close to US$44 million, plus interest and expenses.

The case centres around an investment Lee-Chin made in Lajun Corporation, a Dominican Republic company which held a long-term concession contract to manage a landfill in Santo Domingo. This concession was managed by his son Adrian Lee-Chin, who served as Lajun’s general manager.

Contention arose when in 2017, the Dominican Republic took military control of the landfill as well as brought local actions to nullify and terminate the concession based on an alleged environmental emergency.

This saw Lee-Chin securing an investment arbitration against the Dominican Republic, due to what he saw as the country’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.

Here was a case of First Impression under the Caricom-Dominican Republic Free Trade Agreement.

After more than five years of arbitral proceedings, on October 6, 2023 the Arbitral Tribunal issued its Final Award in favour of Lee-Chin.

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 Arbital Tribunal ordered the Dominican Republic to pay Lee-Chin in excess of US$43.59 million plus interest.

The Dominican Republic decided to dig in its heels and fight.

It argued that the tribunal’s determination of the final amount of compensation of the value of Lajun’s shares “was based on an erroneous application of the elements taken into account by the tribunal in calculating the fair market value of Lajun’s shares that Lajun could have obtained between 2017 and 2034, which were listed in paragraph 558 and applied in paragraph 559 of the Final Award.

Last week, the Dominican Republic lost again with the Tribunal determining that the Final Award contains no calculation errors that fall within the scope of application of Article 36(1) of the Rules. “Accordingly, the tribunal dismisses the Request for Rectification of the Final Award filed by the Respondent in its entirety.”

The tribunal importantly made it clear that it is bound by fairness and what is right.

“An arbitration proceeding is not a purely economic or financial exercise, but rather a- modest as it were-materialisation of international justice. As such, the Tribunal is not bound by any theory postulate in its assessment of the appropriate level of damages to be awarded. On the contrary, the Tribunal is vested with broad powers to assess the compensation due for the proven violation of the obligations assumed, including the fair market value of Lajun’s shares, regardless of the approval or disapproval of the Parties’ experts,” read part of the tribunal’s determination.

Lee-Chin, a Jamaican-Canadian billionaire, has said in the past that the Dominican Republic does not protect Jamaican businesses investing in the country and so, many are left vulnerable. In recent years, both JMMB and Jamaica Producers have made significant investments in the Dominican Republic.

Five years ago, Lee-Chin declared: “ The Dominican Republic Government is now taking the position that investors are not protected under the Caricom agreement it signed with Jamaica to protect investors. Jamaica and Caricom investors have no protection when they invest in the Dominican Republic.”

It is not known whether Lee-Chin has revised his stance on this now.

It is anticipated that Lee-Chin will now move on to the DC Federal action.