CASTRIES, St Lucia, May 2, CMC – The United States-based oil company, RSM Production Corporation, has instituted arbitration proceedings against the St. Lucia government.
A statement from the Office of the Prime Minister here said that the legal action is in respect of the exploration license which the company was granted several years ago to undertake oil exploration over a specified area of the coast of St. Lucia.
The arbitration proceedings have been filed with the International Centre for Settlement of Investment Disputes (“ICSID”) and the government statement said the Kenny Anthony administration would vigorously dispute and contest the proceedings.
It said that the Office of the Attorney General is in the process of assessing the claim and securing attorneys to represent the interests of the island.
RSM Production Corporation claims that its case against the government is a “simple breach of contract case”.
The US-based company is basing its legal action on two grounds including the fact that notwithstanding two previous extensions by the former St. Lucia Labour Party (SLP) administration to continue exploration, it could not complete its exploration because of the failure to resolve boundary disputes between St. Lucia and neighbouring islands.
It said that this failure constitutes grounds of “force majeure” and the Prime Minister’s Office promises that “more will be said of this ‘force majeure” in due course.
The company is also claiming that former prime minister, Stephenson King, signed “an extension to the Agreement which he subsequently retrieved” and that former planning minister, Ausbert d ”Auvergne “has publicly confirmed that Prime Minister King, did, in fact, sign a renewal of the Agreement in 2007”.
RSM Production Corporation also alleges that by letter dated April 10, 2008, the King government “took the position that the Agreement had expired.
“By claiming that the Agreement has expired, and threatening to place exploration rights in the subject area out to competitive bid, St Lucia has breached the Agreement,” RSM Production Corporation said.