The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s original developer will see his $2.25bn fraud and breach of contract claim against the project’s main contractor go to a full two-week trial before the New York state court in August 2024.

Legal documents seen by Tribune Business reveal that Sarkis Izmirlian’s long-running dispute with China Construction America (CCA) has finally been set down for hearing some six-and-a-half years after it was filed over the Christmas 2017 holidays.

The case has been scheduled for “bench trial” between August 1 and August 16 next year, with the New York State Supreme Court’s judge, Andrew Borrok, issuing a series of case management instructions. All exhibits to be used at the trial will have to be filed with the court by May 29, 2024, with witness lists, affidavits and all pre-trial submissions - including the issues to be determined - to be completed by June 24, 2024.

The trial date is later than Mr Izmirlian had sought, his attorneys having pushed for it to take place this year. They wrote, in a January 27, 2023, letter to Judge Borrok that mediation had proved unsuccessful in solving the two sides’ differences. “Plaintiff believes that it would be worthwhile for the parties to appear at a conference before the court to discuss the upcoming trial. Plaintiff respectfully requests that the court set a date for trial as soon as possible,” Mr Izmirlian’s attorneys argued.

“The trial will be a bench trial, and plaintiff believes that the case can be tried in no more than two weeks. Plaintiff is available on all but the following dates (aside from major holidays) in 2023: June 23 to July 9, and September 29 to October 15.”

The dispute between Mr Izmirlian and CCA has not eased ever since the former was ousted as the project’s developer by the Chinese state-owned contractor and Baha Mar’s financier, the China Export-Import Bank, another Beijing-owned institution in late 2015 after they successfully defeated his Chapter 11 bankruptcy protection bid.

Mr Izmirlian recently doubled down on allegations of “shocking evidence” that CCA “paid illegal kickbacks to the family of Bahamian officials” as part of a plot to seize Baha Mar and establish “Chinese control”. He also threatened to reveal the “damning evidence” if the dispute makes it to a full trial.

Mr Izmirlian, whose family live at Lyford Cay, did not name the families or officials who he was referring to. However, the legal documents suggest their identities may be revealed - along with evidence of the alleged bribes and corruption - before the New York courts should the case reach that stage.

In a blistering opening salvo over their bid for “partial summary judgment” against CCA and its affiliates, the Baha Mar founder and his BML Properties vehicle said that despite failing to complete the multi-billion dollar project on time and on budget when he was in charge, the Chinese state-owned contractor was retained to complete the mega resort - and received a $700m “windfall” - for doing work it should have completed under himself.

“Throughout the project, CCA promised BML Properties that CCA’s management and staff were devoted to the project, that CCA was using best efforts to timely complete the project, and that CCA was acting in the best interests of the project,” Mr Izmirlian blasted.

“However, discovery in this case has revealed shocking evidence of CCA’s fraud and breaches of contract. CCA intentionally delayed construction to extort payments from BML Properties. CCA authorised hundreds of workers to leave the project during the crucial pre-opening period. CCA diverted management and staff to competing projects. CCA paid illegal kickbacks to the family of Bahamian officials to protect CCA’s position.

“And CCA conspired with other Chinese entities to stop construction. Why? To ensure that the resort and casino were transferred fully over to Chinese control.” Baha Mar is now owned by Hong Kong-headquartered Chow Tai Fook Enterprises (CTFE), with Tribune Business having previously revealed evidence suggesting CCA and the resort’s financier, China Export-Import Bank, had long decided it should be a Chinese buyer after ousting Mr Izmirlian.

However, CCA blasted back by accusing Mr Izmirlian of “a nakedly xenophobic attempt to inflame anti-Chinese sentiment” while asserting there was “no evidence” it misused $54m in Baha Mar project funds to acquire the then-British Colonial Hilton.

CCA, in its December 16, 2022, court papers denied that there was any conspiracy involving itself, the China Export-Import Bank and other Beijing-owned entities to force Mr Izmirlian out and wrest control of an asset critical to The Bahamas’ future economic growth and employment levels.

Referring to Baha Mar’s receivership, from which the project was eventually removed and sold, CCA said: “Baha Mar Properties (Mr Izmirlian’s vehicle) writes in its memorandum that this judicially-supervised process reflects a conspiracy among ‘Chinese entities . . . to ensure that the resort and casino were transferred fully over to Chinese control’.

“But Baha Mar Properties does not include an evidentiary cite for this assertion, or otherwise cite evidence to support its implicit accusation that the end results of the Bahamian judicial proceedings were improper or tainted. Instead, the accusation appears to be a nakedly xenophobic attempt to capitalise on and inflame anti-Chinese sentiment.”