The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s contractor was yesterday ordered by 3pm to produce potentially several hundred more documents disclosing its ‘legal strategy collaboration’ with the Bahamian government in relation to the $3.5 billion project dispute.

Judge Kevin Carey, sitting in the Delaware Bankruptcy Court, ordered that China Construction America (CCA) produce all documents divulging its dealings with the Government between June 29 and July 15, 2015.

And he also ruled that documents showing collaboration with Baha Mar’s $2.45 billion financier, the China Export-Import Bank, be handed over the developer by midday yesterday.

Tribune Business was unable to confirm before press time last night whether CCA had provided the documents subject to Judge Carey’s ruling, or how many, but there was no reason to doubt it had complied.

However, it is possible that Baha Mar has been able to view several hundred more documents potentially vital to its allegation that the Government ‘colluded’ with its Chinese partners in developing a strategy to oust its majority owners, the Izmirlian family, from the project.

CCA had asked the Delaware court to grant it a ‘protective order’ to block production of all communications between itself and the Government post-June 29, 2015, which was when Baha Mar had filed for Chapter 11 bankruptcy protection.

The China Export-Import Bank sought similar protection from the court, with both arguing that Baha Mar’s discovery demands were “unwarranted and inappropriate”.

“CCA objected to the debtors’ requests on a number of grounds, including that certain documents are protected by the attorney-client and work product privileges,” Judge Carey wrote, “and further, that the exchange of information between CCA and the Bahamian government is protected by a common interest or community of interest privilege.”

He had ordered on August 10 that CCA provide Baha Mar with a log of all documents it claimed were covered by such protections.

The contractor “produced more documents and a privilege log identifying 302 documents that were withheld under the common interest doctrine”.

CCA produced more documents and “a supplemental privilege log” containing two categories into which it had divided 168 documents.

Baha Mar claimed the logs “lacked sufficient detail”, and with the parties unable to resolve the dispute themselves, Mr Carey reviewed the CCA documents himself.

He yesterday granted CCA’s protection request “in part”, finding that the contractor had been unable to prove that it and the Government “shared a common interest” before July 15.

Nor was it able to prove that the China Export-Import Bank had such an interest before July 14, as CCA had originally claimed.

As a result, Judge Carey ordered that CCA produce to Baha Mar all “documents reflected in the privilege log, as supplemented” that were exchanged and written between itself and the Government before July 15. And it appears that all communications with the bank will have to be turned over, too.

Whether two weeks’ worth of communications will provide Baha Mar with the ‘smoking gun’ it is seemingly seeking in time, given that the motion to dismiss its Chapter 11 case will be heard tomorrow, is doubtful.

Still, Judge Carey ruled: “In this matter, CCA argues that it shared a common legal interest with the Bahamian government in establishing the Bahamas as the appropriate forum for the debtors’ insolvency proceeding.

“There is no written agreement between CCA and the Bahamian government reflecting the parties’ intent to engage in conduct designed to fall within the community of interest privilege. Here, the parties assert that their ‘agreement’ is reflected in the documents submitted for review.”

While many of the communications between the two sides’ attorneys carried the line ‘common interest privilege asserted’, Judge Carey said the documents did not show this was asserted prior to July 15.

“CCA asserts that the China Export-Import Bank also shared common legal interest with CCA and the Bahamian government in establishing the Bahamas as the appropriate forum for the debtors’ insolvency proceeding, starting on July 14,” Judge Carey ruled.

“However, the documents submitted fail to provide sufficient evidence to support a conclusion that China Export-Import Bank joined in the assertion of a community of interest privilege at that time.”