Marshall Islands Correspondent


MAJURO, Marshall Islands — More than a year since winning a $9.5 million award from independent arbiters in its case against the Federated States of Micronesia for damages on a major Chuuk road and sewer project, Pacific International Inc. will finally get its day in court April 8.

PII has now won two awards from independent mediation and arbitration panels, but remains in limbo — unable to collect on either award.

Despite all motions and counter motions in follow up to the March 2020 arbitration award being filed with the FSM Supreme Court by May 7, 2020, it wasn’t until March 26 that FSM Judge Beauleen Carl-Worswick scheduled a hearing for oral arguments on April 8. The 11-month wait for a court date on its court-ordered arbitration award is just the latest twist in the seven-year legal battle for PII.

After being terminated in 2013 with most of the work complete on a $25 million road project in Chuuk, PII filed suit for damages in the FSM Supreme Court in 2014. That led to agreement between the FSM and PII to engage in a mediated settlement. On June 3, 2015, an independent mediator awarded PII an initial $2 million on a total $6 million award.

Pacific International Inc. staff are shown working on the Chuuk road and sewer lines project in 2011.
Journal file photo

But the FSM refused to pay it despite having agreed to mediation. This forced PII to return to the FSM Supreme Court to revive the litigation. In late 2017, it asked the court to approve an arbitration plan, which was a provision for settling disputes in the construction contract between the FSM and PII.

In 2018, at Carl-Worswick’s direction, the dispute moved to arbitration by an independent three-member panel of the International Center for Dispute Resolution. A preliminary arbitration conference was held January 22, 2019, followed by the full arbitration hearing over a 10-day period starting June 18, 2019. This was followed by two rounds of post-briefs being filed by attorneys for PII and the FSM government.

On January 31, 2020, the arbitration tribunal re-opened briefly for further submissions. Arbitration wrapped up February 12, 2020 — nearly 13 months after it was initially started. The arbitration panel awarded PII $9.5 million on March 20 last year.

In early April last year, PII’s Guam-based attorney Thomas M. Tarpley returned to the FSM Supreme Court asking it to enter judgment for PII as a result of the arbitration award. There followed legal motions and counter-motions by the FSM and PII. The FSM sought more time, and then filed a brief asking the court to reduce the award from the $9.5 million to the $6 million of the earlier mediation, which it had refused to pay five years previously. This was objected to by PII. Ultimately all motions and counter motions were filed by May 7 last year, according to PII CEO Joseph “Jerry” Kramer.

This was followed by seven months of silence from Carl-Worswick, who has handled the case since it was filed in 2014.

After this long period with no response from the court, PII filed a “request for a ruling” on Dec. 21. It took Carl-Worswick more than three months to respond to PII’s request by setting the April 8 hearing.

Asked for comment about the delays in resolution of the PII-FSM arbitration award, Richard Clark, the press secretary in the FSM Office of the President; said he could not comment on the matter. “I am advised that there are unresolved legal issues pending before the Supreme Court,” he said in an email reply in mid-March. “I am advised that motions have been filed by both parties, and that they are waiting for the Court to rule on those motions. Thus, I am advised I am unable to provide further information at this time.” mbj