2009 EXPROPRIATION REPORT: ANTIGUA AND BARBUDA

UNCLAS SECTION 01 OF 02 BRIDGETOWN 000360

SENSITIVE
SIPDIS

STATE FOR EB/IFD/OIA FOR HEATHER GOETHERT, KIMBERLY BUTLER
L/CID FOR PATRICK PEARSALL

E.O. 12958: N/A
TAGS: CASC EINV KIDE OPIC PGOV
SUBJECT: 2009 EXPROPRIATION REPORT: ANTIGUA AND BARBUDA

REF: STATE 049477

THIS CABLE IS SENSITIVE, BUT UNCLASSIFIED. PLEASE PROTECT
ACCORDINGLY.

--------------
Summary
--------------


1. (SBU) The United States Government is aware of one (1)
claim of a United States person that may be outstanding
against the Government of Antigua and Barbuda (GOAB) End
Summary.

Claimant Designation
--------------


2. (U) Claimant A

Date of Expropiation
--------------


2. (U) 2002

Cse History
--------------


3. (SBU) In Deceber 2001, Claimant A (a holding company
comprise of 98 percent U.S. and 2 per cent Canadian
sharholders) requested that Embassy Bridgetown interven
with the GOAB to halt the expropriation of HalfMoon Bay
(HMB),a 110-acre beachfront property. Despite Post
interventions with the GOAB Prime Mnister (PM),the
Permanent Secretary, and the Miister of Tourism, the
expropriation was approved y Parliament on January 11, 2002.


4. (SBU) Accoding to the GOAB, the owner's failure to
re-open the resort property, which had been severely damaged
by Hurricane Luis in 1995, was depriving Antiguans of badly
needed tourism revenue. The GOAB also alleged that Claimant
A owed back taxes to the GOAB and severance pay to 150
workers when the hotel was closed in 1995. Claimant A
acknowledged liabilities, totaling less than $200,000 on a
property estimated by Claimant A to be worth over $32
million, but alleged that the GOAB obstructed its repeated
efforts to finance the restoration of the property since
1995, and refused to meet with lenders since 1999. Claimant
A alleged that its prospective lenders required a letter from
the GOAB confirming that the government did not intend to
expropriate the property.


5. (SBU) Claimant A filed an injunction in January 2002
alleging abuse of power on the part of the GOAB. Although
the courts denied the GOAB's application to strike out the
judicial review, the GOAB appealed this decision. The GOAB
also stated on the record that Claimant A would not be
evicted from the property until the court proceedings were
finalized. The Eastern Caribbean Court of Appeal upheld a
lower court's decision that refused to bar the GOAB from
expropriating the Half Moon Bay Resort. Claimant A
subsequently requested and was granted leave to appeal to the
Privy Council (the final court of appeal) on May 26, 2003.


6. (SBU) On November 2, 2004, Prime Minister Spencer told
then U.S. Ambassador Mary Kramer that they remained committed
to ceasing litigation and returning the property, but sought
cooperation and flexibility from Claimant A in arranging for
its return. On July 18, 2005, the GOAB passed an Act of
Parliament returning the property under three conditions: 1)
Claimant A must drop all legal action against the GOAB; 2)
Claimant A must sign an indemnity exempting the GOAB from
future legal action; and 3) Claimant A must pledge to
redevelop the property. In an October 17, 2005, letter to
the GOAB, Claimant A rejected the parliamentary offer and
proposed mediation as an alternative, which the GOAB rejected.


7. (SBU) On February 16, 2006, Claimant A met with the Deputy
Chief of Mission and discussed plans to pursue the Privy
Council appeal - which had been put on hold since 2003 in
hopes of a negotiated settlement.


8. (SBU) On April 27, 2006, Claimant A's lawyer met again at
the State Department where Claimant A's lawyer submitted a
draft proposal to resolve the case based on the parliamentary
measure passed on July 18, 2005. The lawyer's proposal was
as follows: Upon receiving clear title to the property,
Claimant A pledges to: 1) drop all legal action against the

BRIDGETOWN 00000360 002 OF 002


GOAB; 2) indemnify the GOAB against future legal action; and
3) promise to redevelop the property. The primary difference
between this proposal and the GOAB proposal of July 18, 2005,
is that the GOAB must first return clear title of the
property to Claimant A before Claimant A takes any action.


9. (SBU) On May 16, 2006, Claimant A's attorney formally
presented the proposal in a letter addressed to both
Ambassador Kramer and Assistant Secretary Shannon. On
September 14, Claimant A,s attorney presented the GOAB with
a draft Memorandum of Understanding based on this proposal.
On September 29, GOAB Attorney General Simon met with
Claimant A,s attorney in Washington to discuss the
Memorandum of Understanding.


10. (SBU) On November 22, 2006 GOAB Attorney General Simon
requested confirmation of Claimant A,s legal representation
after another law firm claimed to represent it. Claimant
A,s attorney responded with a letter on January 11, 2007
that confirmed his representation of Claimant A and that the
other firm was never given instructions to negotiate a global
settlement on its behalf. Claimant A,s attorney also
informed the Attorney General that the other firm was
retained solely to act in the matter which involved the
rectification of the Register to reflect Claimant A as the
registered proprietor of the property.


11. (SBU) On December 6, 2006, Claimant A,s attorney wrote a
letter to U.S. Ambassador Mary Ourisman, Assistant Secretary
Thomas Shannon and the Department of Commerce, describing the
alleged acts of harassment against Claimant A and requesting
USG intervention.


12. (SBU) On January 22, 2007, an Embassy Bridgetown Officer
traveled to Antigua and Barbuda to meet with Claimant A and
obtain an update regarding the property dispute with the
GOAB. Claimant A alleged that the majority shareholder
recently was subject to incidents of harassment and threats,
which she believes were GOAB,s retaliatory measures for her
lawsuits against the government. Claimant A described the
incidents as damaged property, illegal break-ins, denied
access to the Internet, and excessive charges for electricity
usage by the GOAB utility company.


13. (SBU) On February 6, 2007, Claimant A,s attorney
contacted the State Department,s Office of the Legal Adviser
to convey his frustration over several unsuccessful attempts
to communicate with GOAB Attorney General Simon. On April 2,
Claimant A,s attorney sent a letter requesting that the
State Department intervene to help Claimant A obtain the
return of the property at issue. Claimant A,s attorney
described in his letter what he believed to be the GOAB,s
failure to negotiate in good faith with Claimant A, Claimant
A,s supposed inability to obtain justice in Antiguan courts
because of alleged interference by the GOAB in judicial
proceedings, and need for the USG to take action against the
GOAB. Claimant A,s attorney also informed the Embassy that
a hearing concerning the Land Register issue had been
scheduled to be held in Antigua on March 6, but that GOAB
Attorney General Simon allegedly prevented Claimant A,s U.K.
counsel from appearing on its behalf.


14. (SBU) In June of 2007, the Privy Council ruled that the
government could lay claim to the land under eminent domain
laws in place in Antigua and reacquire the land. However,
the Privy Council also ruled that the government could only
exercise this power if it provided the owners their
constitutionally guaranteed &fair compensation8 in a
reasonable time.


15. (SBU) On April 12, 2009 the government provided, for the
first time, an estimate of the properties value, estimating
its value at US$23.5 million. Claimant A,s valuation
estimate by C.B. Ellis place the value of the property at
US$60 million.


16. (SBU) The last contact between the Embassy and Claimant A
was on July 14 2008, when the CDA met with the claimant to
discuss the status of her case. In the opinion of the
Claimant the GOAB is waiting to find a buyer for the property
before they will pay her claim.


17. (SBU) Claimant A: Natalia Querard. Querard is an
American citizen, and has signed a Privacy Act Waiver.
HARDT