ST. GEORGE’S, Grenada--Following a request for arbitration filed last month with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) by Grenada Private Power Limited (GPP), a fifty per cent shareholder of Grenada Electricity Services Ltd Grenlec, along with GPP’s parent company WRB Enterprises Inc., the Grenada Government said is not correct that GPP/WRB had “no choice” but to seek arbitration of this matter.
The purpose of the arbitration is to enforce the Government of Grenada’s contractual obligation to repurchase the 50 per cent Grenlec shareholding that the Government previously sold to GPP.
GPP submitted a formal share repurchase demand to the Government on March 22, 2017, pursuant to the share purchase agreement (SPA) that the Government, GPP and WRB entered into when the Government privatised Grenlec in 1994.
The SPA requires this repurchase to be completed within 30 days following the repurchase demand. Given that Government has not made the mandated repurchase payment, GPP and WRB said they have no alternative means for protecting their contract rights other than by pursuing the ICSID arbitration as dictated by the SPA.
According to GPP, the Grenada Government has to date either rejected or walked away from every effort by the Grenlec team to initiate and engage in meaningful reform negotiations.
“Instead, Government elected to fundamentally scrap and unilaterally restructure virtually every aspect of the long-term contractual and legislative framework that Government originally committed to respect when it privatised Grenlec by selling a 50 per cent shareholding interest to GPP/WRB, plus an additional 40 per cent shareholding to other private regional investors,” the company said in a statement.
GPP said it has been left with no way to protect its legal interests other than to pursue arbitration as mandated by the contract with Government.
“Simply put, this is a contractual issue, and we are now following the contract’s agreed-upon process for dispute resolution. Whilst we remain open to engaging with Government in good faith negotiations where all issues are on the table for discussion, we will continue with the ICSID arbitration process unless and until an agreed resolution with Government is in place,” the company said.
Although claiming that it hopes to continue discussions with GPP/WRB to ensure that the best solution is realised within what it described as a “well-intentioned framework for continued investment and development,” the Government’s own recent actions, rather than working to attract foreign investment, have been actively discouraging such investment.
Not only have the Government’s unilateral actions caused serious operational impairments and economic injury to Grenlec and its private sector investors, for some months the Government has been seeking unilaterally to terminate a 99-year lease, which was signed in 1991, and thus effectively expropriate property occupied by the Grenadian Rex Resorts hotel, which is leased and operated by a UK-based company.
Earlier this year a court in Grenada temporarily blocked the Government’s plan to seize land occupied by the Grenadian, a 172-room hotel located on the island’s southern tip.
The circumstances surrounding the Government’s attempt to enforce a compulsory purchase order regarding the Rex Resorts property have raised a number of questions locally concerning possible ulterior motives on the part of the Government. ~ Curaçao Chronicle ~
