Luxury hotel developer True Blue Development (True Blue) has reportedly initiated urgent proceedings against the Grenadian government before the International Centre for Settlement of Investment Disputes on 17 June 2021.
It must be noted upfront that, as of today 18 June 2021, the Case has not yet been registered by the ICSID Secretary-General. However, True Blue claims to have suffered significant capital and profit losses following targeted and politically motivated action by the Grenadian government.
The explosive allegations relate to a US$99 million project called ‘Kimpton Kawana Bay’ approved by the Grenadian government in 2016 for the development and construction of a new 5-star resort on the famed Grand Anse Beach.
Construction had already reached an advanced stage, before the Grenadian government allegedly made an about turn – seeking to re-open a number of settled issues – in an attempt to justify withholding funding due in terms of Grenada’s ‘Citizenship by Investment’ (CBI) program, according to the media statement issued as part of the concerted effort to publicise the events.
In this regard, True Blue alleges that only its project – the most significant CBI project in Grenada – has been singled out for review, despite the existence of several other CBI-funded projects in Grenada.
True Blue claims the Grenadian government began shifting the goalposts in about July 2020, raising discrepancies and omissions in long since approved papers. This included seeking a downward revision to the budget approved in 2017, imposing restrictions on the non-construction purposes for which funding could be used before completely turning off funding.
In addition, more than 25 CBI applications related to the project have allegedly been left languishing for over four months – even though responses are required within 60 days under CBI rules.
The net effect has been for a number of partner investors to begin withdrawing their investments from the project together with True Blue’s principal, Warren Newfield, resigning as Grenada’s consul general in Miami and ambassador-at-large.
The Grenadian government’s motivations for these actions are unknown, especially as True Blue’s attempts to seek clarification with Grenada’s Foreign Minister and Minister of Finance have reportedly gone unanswered.
It will be interesting to see how this dispute is resolved, especially if crisis-measures implemented to combat the COVID-19 pandemic are raised by the Grenadian government in its responding papers.
True Blue’s request for arbitration was brought under the 1986 Treaty Between the United States and Grenada Concerning Reciprocal Encouragement and Protection of Investment.
Law firm BakerHostetler is representing True Blue and the larger investor group in the proceedings.