BY GIFF JOHNSON
Marshall Islands Correspondent

MAJURO, Marshall Islands — A $14 million lawsuit brought by Pacific International Inc. against the Federated States of Micronesia government has been put on hold to allow a mediation session to take place, possibly in June.

Following the FSM Congress’ recent appropriation of funds to pay for a mediation session, the FSM attorney general’s office requested the lawsuit be “stayed” while mediation happens. PII agreed to put the suit on hold.

PII, a Majuro- and Guam-based company, sued the FSM government late last year for what it says is $14 million in losses from a U.S.-funded Chuuk road and sewer project. The FSM terminated PII in November 2013 with the project nearly complete and has been unable to engage another contractor to finish the project.

Dates have not yet been agreed, but June 18 and 19 are being discussed for mediation, as is the possibility of using professional mediator Antonio Piazza, who is based in San Francisco. The FSM has retained a law firm based in Chicago to represent it in the dispute.

PII CEO Joseph “Jerry” Kramer said his attorneys joined the FSM attorney general’s office in filing a joint motion agreeing to hold off the lawsuit pending the mediation session.

In a development related to the dispute between PII and the FSM, a complaint filed by the FSM government against a Guam engineer for a critical review of the FSM’s management of the Chuuk road and sewer project has been rejected by a Guam engineering board.

After reviewing John M. Robertson’s report on the project in Chuuk and the FSM complaint, the Guam engineering board declared the FSM complaint was “without merit.”

Robertson evaluated PII’s work on the road project up to when it was terminated by the FSM government in late 2013 and concluded that it was the FSM government that mismanaged the project, negatively impacting PII’s ability to carry out the work.