Star Marianas Air, airport regulator mediation fails

Mediation efforts have collapsed for an out-of-court resolution to a long-standing USD2.6 million lease dispute between Star Marianas Air (Tinian) and the Commonwealth Ports Authority (CPA), with the regulator accusing the airline of “insincere” and “disingenuous” behaviour. The parties have been in dispute since 2012 over unpaid passenger facility charges, which the airline argues are excessive. In December 2020, Star Marianas Air (SMA) filed charges against the CPA in the Northern Marianas Islands Supreme Court, alleging breach of contract. The CPA responded with a motion to dismiss and also filed counterclaims against SMA. Following the collapse of mediation, the CPA’s motion to dismiss went to court on April 15, reported the Saipan Tribune. After listening to arguments, Superior Court Associate Judge Joseph N. Camacho ordered the legal representatives to file their respective proposed orders. As previously reported, both sides had agreed to resolve their differences through mediation when they appeared before the Senate Committee on Public Utilities, Transportation, and Communications on March 23, 2021. However, according to the CPA, the airline on March 25 had sent a letter demanding an audit of the CPA under the Airline Use Agreement prior to engaging in mediation, reasoning that the parties would be able to negotiate more effectively with the audit results in hand. On March 31, the CPA had agreed to the request, although it believed SMA was attempting to use the audit to beef up its damages claim. The CPA had proposed a settlement meeting in the week of April 5 to 9, which the airline turned down, insisting on an audit prior to mediation. SMA argued the audit results would assist in computing the CPA’s rates. The airline was also willing to postpone the court hearing to allow for mediation. The CPA, on April 11, had indicated the purpose of mediation would, primarily, be for the settlement of the USD2.6 million owed by the airline and not to revise CPA’s rates and methodology. The CPA also agreed to postpone the court hearing for 45 days. However, on April 12, the carrier had advised the CPA it had decided to proceed with the court hearing.