Statement by the Attorney General, Honourable Justin Simon
Delivered Wednesday, August 18 2004 on the
Guiana Island Development Project

Ladies and Gentlemen of the Press, Good Morning!
Citizens and Residents of Antigua and Barbuda, I greet you warmly!!

Some three and half months ago, I addressed you on the controversy surrounding the Guiana Island Development Project and informed you of Government's appointment of a legal team to review the Agreement, the relevant legislation, and all correspondence touching and concerning the project for the purpose of determining Government's legal position particularly in relation to the ownership of the lands now vested in Asian Village Antigua Limited. I can now advise that on Monday August 16 2004 legal proceedings were commenced by the Government of Antigua and Barbuda against the two companies:

Asian Village Antigua Limited of Road Town, Tortola; and Asian Village (Antigua) Limited of 41 Redcliffe Street, St. John's, Antigua, seeking declarations that the lands or any interest in land held by these two companies, whether as parties to the Agreement, or as registered proprietors with title, or as leasehold proprietors, be forfeited to the Crown and revert to the Government of Antigua and Barbuda for and on behalf of the people.

The Tortola company was registered on the instructions of Lim Say Chong and Dato Tan Kay Hock as an international business company in February 1997 and is therefore a foreign or non-citizen company doing business in Antigua and Barbuda.

The Antigua and Barbuda company was incorporated in December 1996 with NG YEW SOON and Ian M.J. Peacooke both of Malaysia as its Shareholders thus making it a foreign or non-citizen company in light of the fact that the shareholders and directors are not citizens of Antigua and Barbuda.

At the next sitting of Parliament, I will be piloting a Bill to repeal two pieces of legislation and a statutory provision which were enacted by the Lester Bird Administration for the sole purpose of implementing the numerous incentives which the Government had given in its Agreement with Asian Village Antigua Limited the Tortola company and dated the 18th day of February, 1997.

The two pieces of legislation are:

- The Asian Village Resort (Incentives) Act 1997
- The Asian Village Resort (Incentives) (Amendment) Act 1997
- and the statutory provision is Section 3 of The Law Revision (Miscellaneous Amendments) (No. 2) Act 1998.

These actions are being taken pursuant to the advice received from our legal team who delivered their Opinion to me on July 5 2004.

You will no doubt recall that in early 1997 the Hon. Prime Minister then leader of Her Majesty's Loyal Opposition instituted two legal actions in which he asked the High Court to set aside the Asian Village Agreement on the grounds that the Agreement was unconstitutional and therefore unenforceable against the people of Antigua and Barbuda as it represented a sell-out on the part of the Government.

Both actions were dismissed. The subsequent appeal to the Court of Appeal was also dismissed. The matter was fully argued by heavyweights in the legal field: Dr. Fenton Ramsahoye Q.C., and Mr. Cosmos Phillips Q.C. (now deceased) argued on behalf of Hon. Baldwin Spencer. The Government was represented by Mr. Turner-Samuels Q.C. of England, Mr. Karl Hudson-Phillips Q.C. of Trinidad and Tobago and Mr. Anthony Astaphan (later to become S.C.) of the Commonwealth of Dominica.

The concluding words in the judgment of the High Court Judge, Justice Adrian Saunders as he then was, and who is now a judge of the Court of Appeal and currently the acting Chief Justice of the Eastern Caribbean Supreme Court is worth recalling. This is what the learned judge said on November 21 1997:

"The Guiana Island project will certainly have a great impact on Antigua and Barbuda and its people. Mr. Spencer and the members of his party have left this court in no doubt as to how they feel about the project. I do not doubt that their opposition to the Agreement is motivated by sincere and well-meaning aims. I suspect though that for each argument they can make against the project, the Government and its supporters can put forward an equally cogent one in defence of the project. Essentially, I get the impression that the fundamental objection goes towards the scale of the concessions granted to Asian Village Antigua Limited. Has the Government given away too much? Would the project ultimately vindicate the wisdom of the bargain struck by the Government?

This court does not and cannot adjudicate upon such disputes. These are political issues. They are best left up to the Parliament and the people of Antigua and Barbuda for resolution in other for a by lawful means."

Pursuant to the agreement, Asian Village Antigua, Ltd. (the Tortola company), became the owner of 6 parcels of land including Guiana Island and constituting in the aggregate 1,541 acres transferred by Government for the sum of EC $2,700,000.00 on April 24 1998. Government had compulsively acquired those lands in August 1997, having agreed to pay the sum of EC $27,000,000.00 for Guiana Island only; that sum is yet to be paid to the company which owned the island and is now a judgement sum attracting interest at 5% per annum, and forms part of our huge national debt.

Additionally, Asian Village Antigua Ltd. purchased from a private company in an arms length transaction, a parcel of land on the mainland, adjoining Guiana Island consisting of approximately 36 acres for the sum of US $680,000.00 equivalent to EC $1,836,000.00. I say this to give you an idea of the gross undervalue at which Government sold 1,541 acres of prime development land and to set the stage for the legal findings of our team of eminent counsel.

Asian Village Antigua Ltd. also obtained from Government 99 -year leases in respect of 8 other parcels of land with an aggregate acreage of approximately 9½ acres at the annual peppercorn rent of US $100.00 for each parcel.

That land transaction involving the acquisition of Crown lands was unprecedented in Antigua and Barbuda's history, though it may now well be rivaled by only one other person - again under the Lester Bird's administration.

More on this at a later time!

The public purpose of the Guiana Island project is reflected in the object of the Agreement which states that:

"Government and the company recognise and acknowledge that the project may constitute the largest infrastructure development of Antigua and Barbuda and the concessions to be granted form a necessary and integral component of the Project and the parties hereto will assist each other and do all things as may be reasonably necessary to ensure the success of the Project."

The public purpose nature of the Agreement was accepted and acknowledged by both parties. In a letter dated October 14 1999, to then Prime Minister Lester Bird, Lim Say Chong wrote:

"Prime Minister, you have placed a heavy burden on our shoulders by relying almost totally on us for your country's near and medium term development."

The Prime Minister's response by letter dated October 15 1999, said in part:

"The reality is that such a responsibility was assumed by your company when you required the significant concessions and incentives that you were accorded."

By this time however, things had begun to go very wrong!!

It is common knowledge that every contract or agreement must state a consideration or cost to be paid by the party obtaining the benefit of the contract. The consideration may be expressed in money as in the transfer of land or on the obtaining of an employee's services in an employment contract. It may alternatively be expressed in kind as in a case where two people do an exchange of land or where a fishing boat is lent in return for a part of the day's catch.

The Asian Village Agreement's consideration was not merely a monetary one, and was uniquely and particularly expressed thus:

"In consideration of the payment by the Company of the sum of EC $15,500,000.00 and the development of the project, the Government undertook that it would sell, transfer, or lease (as the case may be) the listed parcels of land, and grant to the company the various concessions, rights, privileges, and licences as stipulated.

"In return the company undertook to purchase and accept the transfers or leases, and the concessions, rights, privileges, and licences paying therefore the total purchase price of EC $15,500,000.00 as well as the cost of the Project design and would secure the financing and the construction and management of the Project in accordance with the Company's plan."

The $15,500,000.00 was to be paid by five installments of $2,700,000.00 each, the first of which being due on the date of completion described as the date when the lands were transferred and the legislation passed granting the proposed concessions, rights, privileges, and licences; the second to be paid 24 months after the completion date; the third, 36 months after that date;
the fourth, on the expiry of 48 months; and the fifth, 60 months after the date of completion.

Additionally, the Agreement stipulated that the company was:

- to obtain all the finance necessary to design, construct, operate, manage and maintain the Project;
- to ensure that all construction was carried out in a proper and workmanlike manner;
- to build or substantially build the first phase consisting of a resort project of not less than 250 rooms, a casino, and a golf course within 24 months of the completion date;
- to complete all infrastructure works; and
- the 250 rooms to be completed so as to be in a position to receive its first guest by Christmas 1998.

The "completion date" had initially been fixed as July 30 1997 or any extension thereof granted by the Company. The legislation was enacted by March 27 1998; the ground-breaking ceremony took place on April 24 1998; the first payment was made on April 27 1998; and the land transfers were effected by May 13 1998. The stage had been set. Indeed, by letter dated October 14 1999, then Ambassador James "Bags" Thomas in expressing Government's frustration to the Company wrote, inter alia.

"This (Ground-breaking) ceremony was attended by no less a person than Dato Tan, who during the ceremony declared, among other things, that work would immediately commence on the project site. Indeed at the end of the ceremony, work was started and was discontinued or abandoned. In the view of the Government of Antigua and Barbuda the performance by the parties of their obligations constitutes sufficient evidence of completion."

There is an abundance of correspondence between the Government and the Company which discloses that the Company has defaulted in its obligations as follows:

(1) failure to pay the scheduled payments;
(2) failure to pay the rent for the leasehold lands;
(3) failure to obtain all or any of the finance necessary for the design , construction, operation and management of the Project; and
(4) failure to construct the first phase or any portion of the project.

The correspondence further discloses that the reason why construction never commenced was due to the financial incapacity of the company and its inability to raise the necessary funds in the financial markets. Letters written during the period July 2000 to May 2001 show the Company trawling from US bank to Arab bank unsuccessfully in search of financing, and in January 2002 Government takes on the lead role of finding financing for the Company in its desperate attempt to salvage the project. By Memorandum dated November 13 2002, Dato Tan signifies his unwillingness to go forward with the project unless there is procurement of other capital sources which the Government in a last attempt unsuccessfully seeks from the Chinese in June 2003. Further exchange of correspondence brought no hope.

On November 12 2003 Cabinet finally accepted that Asian Village Antigua Ltd. had no known source of funding, and took the decision to serve Notice of Default on the Company. The Notice was given that very day under the hand of the then Prime Minister Lester Bird. Cabinet also decided to re-acquire the land which the Crown transferred to the Company and to terminate the leases by re-entering on the leased parcels.

Dato Tan Hock's lawyers responded with two letters dated December 8 and December 19 2003 rejecting any breach by the company and claiming that Government had failed to live up to its obligations in that a completion date had not yet been reached. Please understand the enormity of that allegation: That almost 7 years after the Agreement was signed, Dato Tan was now claiming that Government had not passed the necessary legislation or transferred the required lands. Lester Bird then did an about turn; well, almost an about turn. His subsequent letter of January 5 2004 to Dato Tan lawyers is instructive and I shall read it in full:

"Gentlemen,

The Government of Antigua and Barbuda does not agree with your allegations that Asian Village Antigua Limited is not in breach of the Agreement.

However in light of the fact that your client Dato Tan Kay Hock has represented to me verbally that Mr. Allen Stanford has concluded with him a firm offer of purchase for the Guiana Island, surrounding properties and other properties, this letter serves to inform you that upon consideration of these prevailing factors the Government without prejudice to its position as to the breach alleged, hereby agrees to the request of Asian Village Antigua Limited as outlined in your letter of 8th December 2003 to withdraw the Notice of Default and Termination.

The Government looks forward to meeting with Asian Village Limited within fourteen days to discuss the sale of the said properties."

Eminent Counsel in their 53 page Legal Opinion have, on a consideration of all the facts and the intervening circumstances, advised this Administration that Asian Village Antigua Ltd. is in breach of the Agreement in so fundamental a manner that we can reclaim title to the lands which were transferred and re-possession of the leased lands. Additionally and importantly neither of the companies (they being foreign companies) applied for or obtained a licence to hold the lands as is required under the Non-Citizens Land Holding Regulations Act. Whether by default or good fortune, neither the Agreement nor the Incentive legislation provided exemption from the provisions of that Act.

The legal proceedings filed on Monday claim that Asian Village Antigua ltd. holds the lands as an unlicensed foreign company as a consequence of which the lands stand forfeited to the Crown pursuant to section 5 of the Non-Citizens Land Holding Regulation Act at the suit of the Attorney General. We have excercised that option in preference to seeking remedies for breach of contract because the Agreement provides that "all disputes, controversies, claims, or differences arising out of or relating to the Agreement" should be referred to arbitration by the London International Chamber of Commerce for a hearing in London and in accordance with the laws of England. On an action for breach of contract, the Company would have the right to apply for a stay of such court proceedings until the dispute is heard by the appointed arbitrators. In the interest of both time and cost, forfeiture proceedings are the better alternative, and we have filed accordingly.

Finally, I must needs say that my Government is acutely conscious of the need to expand our tourism product and hence is prepared to give due consideration to any touristic development of that area. But we will not enter into any such negotiations unless and until title to these lands are in our hands as the legal and rightful owners for and on behalf of the people of Antigua and Barbuda.

We are conscious too, of our obligation to satisfy the various judgement debts entered against the previous Administration and related to the failed project:

- To Guiana Island Farms Ltd., beneficially owned by the Fuller family: EC$27,062,268.00 and climbing from November 2002 at 5% per annum for the compulsory acquisition of its lands by Government.
- To Lona Eileen Bufton: EC $421,000.00 as damages for false imprisonment by the Police High Command on the instructions of the Bird Regime to forcibly remove her from Guiana Island; and
- To Cyril and Eileen Bufton: EC$2,024,000.00 as damages for loss of their lease, their home, personal effects, animals, and their way of life. In fact, compensation for their leasehold interest should properly be included in the compensation amount agreed for payment to Guiana Island Farms Ltd.

This Administration has inherited these debts, and as a responsible Government accepts its obligation to pay. The Lester Bird Administration left office without putting in place any arrangements for retiring any of the judgment debts, and nothing was done then to enforce them. Proverbially, we have been left to hold the bag. The Ministry of Finance is seeking to address these financial obligations in our Budgetary Estimates for the financial year 2005. We therefore implore the understanding and patience of our judgement debtors and their attorneys, unless of course you seek to bring this Administration to its financial knees for a cause it vehemently opposed and a burden it has regrettably inherited from the grandiose recklessness of the Lester Bird Administration.

I thank you !!