By Staff Writer
December 17, 2021
Months after True Blue Development Ltd (TBDL) took the Government of Grenada to the World Bank International Centre for Settlement of Investment Disputes (ICSID) over the failed Kimpton Kawana Bay project, Prime Minister Dr Keith Mitchell says it was the developer’s fault for not following the rules.
Dr Mitchell, in an exclusive interview with Caribbean Magazine Plus, said: “The Kawana Bay project is still alive because the guy took us to the international court and we are dealing with that.” Comparing the Kawana Bay matter to another matter that went to the ICSID, the Grenlec case, Dr Mitchell said: “The Kawana Bay is different than the Grenlec issue. The Grenlec issue is something different, it was with the WRB and the owner of the electricity company and because of the kind of deal that was given to them in 1994, it boxed in the government on doing anything about Grenlec.
“When you have a foreign entity only interested in profit, controlling your basic utility in your country. No country needs to have that. You have to have control, the citizens have to have control of your major security asset. Grenlec is a national security asset, because if the man takes off electricity in your country it can destroy your country. So you can’t leave that in the hands of anybody. I think that was a mistake made by the NDC (National Democratic Congress).”
However, the Kawana Bay project is much different than that of the Grenlec ICSID arbitration because Kawana Bay is a private project and never intended to be nationalised by the government at any time, prior to or after negotiations between sides collapsed earlier this year leading it to World Bank arbitration.
Warren Newfield, TBDL’s principal had said that Prime Minister Mitchell was “trying to squeeze the project into failure,” something Dr Mitchell has denied.
Funding for the project primarily comes from private investors participating in Grenada’s CBI through which investors purchasing condos at Kawana Bay are able to gain citizenship.
“Although funding did not come from government sources, True Blue alleges that the Government’s financial squeeze included revoking a 2017 approved project budget of US$99m, imposing administrative rules that limit how the developer could use of investors’ money for the project, and ultimately halting approval of CBI applications that provide the principal source of capital,” an earlier statement from TBDL said.
Dr Mitchell also said about Mr Newfield, who was also at one point Ambassador at large and Consul General for Grenada in Miami and was appointed by Dr Mitchell but has now resigned amid the fallout of the Kawana Bay failure, “His problem is that he didn’t want to follow the rules and he felt that he should be exempted from the rule, which is you have to invest. I think that’s the key because don’t forget right now we have the thing before the court, so we should not be making too much comment on it publically at this time. There was no personal issue, just he had to follow the rules and he wasn’t willing to follow it. That’s it.”
The rules Dr Mitchell is referring to is the rule that when investors use the Citizenship by Investment programme, they must also come up with a significant portion of the investment along with leaving the funds raised from the CBI programme in escrow until a determined time. He has also gone on record stating that he was “not aware” of TBDL’s principal having an interest in using the CBI programme to finish the project.
Mr Newfield has denied these allegations in the past and branded them as patently false and also told Caribbean Magazine Plus that he “did follow the rules as well be evident from the results of the ICSID arbitration.”
Mr Newfield further alleges that there is a “reason” why Dr Mitchell “targeted” his Kawana Bay project and that too will come out in the arbitration process.
Unfettered by how the ICSID process looks to international investors looking to do business in Grenada, Dr Mitchell highlighted how the country is red hot with investments now having just launched a project in St Patrick earlier this week. He doesn’t feel investors will be put off by one investment that went sour. “I mean, there are many investors who have come here and took out lawsuits against governments in the Caribbean. We welcome people, but they must obey the rules and if they don’t want to obey the rules then we have to deal with it.
He continued further dismissing any major fallout from the Kawana Bay arbitration, “Every contract there are conditions in case there is a disagreement, a section that speaks about arbitration or how do you solve disputes. It’s a normal thing.”
Mr Newfield also told Caribbean Magazine Plus in November that “realistically” this arbitration process with the ICSID can take up to four years. He added that the property is just “going to sit there unless something can be worked out in the meantime,” but the ultimate goal is to follow through with the arbitration. He also said that he is not actively looking for any other investment projects in Grenada right now.