US oil company taking St Lucia to arbitration

The United States-based oil company, RSM Production Corporation, has instituted arbitration proceedings against the St Lucia government for breach of contract over exploration rights. A statement from the office of the prime minister in Castries said the legal action is in respect of a license the company was granted several years ago to undertake oil exploration over a specified area of the coast of St Lucia. he arbitration proceedings have been filed with the International Centre for Settlement of Investment Disputes (ICSID). he government statement said the Kenny Anthony administration would vigorously dispute and contest the action. t said that the attorney general’s office is in the process of assessing the claim and securing attorneys to represent the interests of the island. SM Production Corporation claims that its case against the government is a “simple breach of contract case”. The company is centering its legal action on two grounds, including the argument that notwithstanding two previous extensions by the former St Lucia Labour Party (SLP) administration to continue exploration, it could not complete it because of a failure to resolve boundary disputes between St Lucia and neighbouring islands.

The company is also claiming that former prime minister, Stephenson King, signed “an extension to the agreement which he subsequently retrieved.”

In addition, RSM said former planning minister, Ausbert d’Auvergne “has publicly confirmed that prime minister King, did, in fact, sign a renewal of the agreement in 2007.”

RSM Production Corporation also alleges that by letter dated April 10, 2008, the King government “took the position that the agreement had expired.

By claiming that the agreement has expired, and threatening to place exploration rights in the subject area out to competitive bid, St Lucia has breached the agreement,” RSM said.