Citations
- 216 F. Supp. 2d 1320
Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW
JAMES LAWRENCE KING, District Judge.
I. Parties, Jurisdiction and Venue
1. Aruba is a foreign state as defined in 28 U.S.C. § 1603, located in the southern Caribbean approximately 12 miles off the coast of Venezuela. It has a population of about 100,000 people, who acquired separate political independence within the Kingdom of the Netherlands in 1986. The Government of Aruba (“GOA”) has a parliamentary system of government, consisting of 21 elected representatives and seven Ministers. Parliament appoints the government, or Ministers, to govern the country. Between 1999 and 2000, when the events in dispute in this case occurred, there were seven Ministers. Prime Minister Hendrik Eman (“Henny Eman” or “Prime Minister Eman”) was the Prime Minister of Aruba during that period. The Prime Minister is responsible for coordinating the execution of the government’s programs.
2. Robertico Croes (“Tico Croes”) was the Minister of Finance of Aruba during the events at issue in this litigation, responsible for overseeing and protecting the national treasury. Minister Gilberto F. Croes, Jr. (“Junior Croes”) was the Minister of Transportation, Communications and Sports in Aruba during the period 1998 — December 31, 1999. Mr. Mike de Meza was appointed by the GOA Council of Ministers as its authorized representative to the racetrack project at issue in this case. Senator Glenbert Croes was the head of the OLA party, the minority party in the coalition which ran the government, and at various times the Vice Prime Minister of Aruba and a member of Parliament.
3. Defendant Ralph Sanchez has an international reputation as a developer of automobile racetrack projects and promoter of professional motor car sport events. Designing, building and creating racetracks and promoting professional motor sport events, has been his principal business for over 20 years. He created the concept, obtained the approval from governmental agencies and the sanctioning bodies governing professional race car events and conducted, commencing in 1981, Grand Prix Racing on the streets of Miami for the ensuing 15 years. He is responsible for creating, designing and building the Homestead Speedway in South Florida. It opened in 1999 and operates on a 2.1 mile track, situated in 360 acres, with permanent seating for 36,-000 spectators and an additional 18,000 temporary spectator accommodations. This is internationally recognized as one of the finest motor sport racing facilities in existence. The Defendant Sanchez pioneered the idea of broadcasting, to over 120 countries, the race car sporting events that he promoted. His racing events have been televised throughout the United States and to Latin America.
4. The Defendant’s involvement with these racing events has been extremely successful with positive economic impacts for those communities in areas where he has been personally involved, built race tracks and conducted races. The Government of Aruba aggressively solicited the involvement of Ralph Sanchez to develop a race track on the island of Aruba for the purpose of developing or bringing the same type of positive economic impact to Aruba that Mr. Sanchez had brought to South Florida with the development of the Homestead Speedway project.
5. To implement the construction of the Aruban race track project, Mr. Sanchez created two corporations, which are Defendants and Counter-Plaintiffs in this case: Sanchez Motorsports Group [“SMG”] and Motorsports America, Inc. [“MAI”]. Both corporations have their principal place of business in Miami-Dade County, Florida with Defendant Sanchez occupying the positions of President and Chief Executive Officer of each.
6. Senator Glenbert Croes, leader of the OLA coalition in the Aruban Parliament, a strong supporter of the race track project, testified “Mr. Sanchez’ involvement in the project was critical because there was no one else known to the Government with Mr. Sanchez’ experience and knowledge in the motorsports industry. The Government of Aruba hoped that it could leverage Mr. Sanchez’ reputation to bring United States based racing series events to Aruba. The participation of the United States racing series in such a venture was critical to its success. It was also clear that no one in Aruba had the expertise to develop or manage such a project on their own.”
7. Despite the best efforts of a great number of people on all sides of this case, the Aruban race track was not constructed. Multiple issues involving determination of the responsibility for the failure of the project and the subsequent damage flowing therefrom, were tried non-jury, to this Court between May 20th and June 7th, 2002. This Court has subject-matter jurisdiction pursuant to 28 U.S.C. § 1332 and pursuant to 28 U.S.C. §§ 1330 and 1607. Venue lies in the Southern District of Florida pursuant to 28 U.S.C. § 1391.
II. Findings of Fact
8. In February of 1999, Ralph Sanchez received a phone call from Mr. Carlo Man-sur, a prominent wealthy Aruban businessman and developer who invited Mr. Sanchez to come to Aruba for the purpose of discussing his plan to built a go-cart race track on the island. Mr. Sanchez had never met nor spoken with Mr. Mansur before receiving his call about building a race track and his last visit to the island was 15 years prior to the phone call.
9. Mr. Mansur is a 33-year-old chief financial officer of the Rubin Mansur Holding Company, a family-owned extensive business entity involved in a substantial number of shipping, importing, construction and development interests in Aruba. He is chairman of the Aruba Airport Authority, supervising and operating the international airport in Aruba. The airport was built in cooperation with the Government of Aruba and involved a $90 million dollar bond issue for the airport. Replying to Mr. Mansur’s inquiry as to whether or not Mr. Sanchez would be interested in helping develop such a project, the Defendant replied that he was not interested. A week later, Mr. Sanchez got another call from Mr. Mansur and was asked if he would be willing to help to built a full-scale, championship-type international race track. Mr. Mansur represented his role to be that of developer and builder of the project in cooperation with the GOA; with the Defendant’s role to be an advisor, consultant, designer of the track and responsible for getting the sanctioning agreements to bring the professional race track drivers and racing organization to conduct races when the track was built. Mansur would be responsible for financing the project and would own the track when completed. Sanchez was to be a service provider. Mr. Mansur was the one who was in contact with the government officials who were promoting the idea of developing a race track to help the Aruban economy.
10.Thereafter, in March 1999, officials of the GOA, Gilberto F. Croes, Jr., the GOA’s then Minister of Transport, Communications, Utilities and Sports (“Minister Junior Croes”), Franklin Abath, the Director of the Government Land Administration (“Domeinbeheer”), and Elton Liue-A-Tjam, Director of the Department of Land Use and Environment (“VROM”), traveled to Miami-Dade County, Florida to visit the Homestead Motor Speedway located in Homestead, Florida, and meet its developer, Ralph Sanchez. The purpose of the visit was to obtain an understanding as to how the development of a professional motorsports facility could benefit the country of Aruba. During their visit, the GOA officials became very impressed with the significant positive economic impact the Homestead facility had brought to the Homestead area after it was devastated by Hurricane Andrew in 1992, and felt that such a project could have a positive impact in the country of Aruba.
11. Mr. Sanchez’ reputation was important to the GOA officials because they wanted to be certain they were dealing with knowledgeable and experienced members of the motorsports industry if the GOA were to develop a motorsports project. After meeting with him and his staff, and reviewing the track at Homestead, the GOA officials expressed themselves as being very impressed with Mr. Sanchez’ excellent reputation in the motorsports industry. Mr. Sanchez has been one of the most respected and successful promoters and organizers of professional motorsports events for over the past 20 years. As noted above, he has been, among others, the co-founder of the Indy Lights series in the 1980’s and the developer of the Homestead Motorsports Speedway, a motors-ports facility considered to be one of the finest in the world. Approximately eighteen years ago Mr. Sanchez created the Miami Grand Prix race, then held in downtown Miami, which grew to be a major international Grand Prix race.
12. Mr. Sanchez was interested in the GOA’s proposal for a racetrack in Aruba, since he had already been involved in developing a racing series in Latin America and the Caribbean. Mr. Sanchez, through SMG, one of his companies, had the year before signed an agreement (Def.Ex.221) with SCCA, one of the United States mo-torsports sanctioning bodies, with respect to a license to sanction races in Latin America and the Caribbean.
13. After the visit from GOA officials in March 1999, Mr. Sanchez began to evaluate the economic feasibility and the substantial problems of design, construction and racing organization approvals inherent to such a project. In April, 1999, he traveled to Aruba with Mr. Jim Mock, the engineer with the architectural and engi7 neering firm of Bermello, Ajamil & Partners, the firm with whom he had worked on the Homestead Motor Speedway, to look at possible sites in Aruba. Minister Junior Croes drove Mr. Sanchez all over the island and arranged a helicopter viewing of possible sites for the track location for Defendant, Senator Glenbert Croes and others. As a result of that visit, he determined that the best site was at Tierra del Sol, which was on the N.W. corner of Aruba, near the heavy developed tourist-hotel beach area. This area, unlike the poorly developed San Nicolas area, has a plentiful supply of recirculated, purified water from the vast number of hotels adjacent to a beautiful championship golf course. The infrastructure; good roads and a reliably available source of electricity were already in place in this site adjacent to the California Lighthouse. (Def.Ex.l).
14. On April 30,1999, Mr. Sanchez also signed a more detailed agreement with SCCA (Def.Ex.225), in which SCCA agreed to work in conjunction with MAI and SMG in promoting and sanctioning racing events in Latin America, the Caribbean and Aruba. For the Aruba racetrack project, Mr. Sanchez made a total of 53 trips to various cities in the United States and the Caribbean, including 17 trips to Aruba.
15. On May 20, 1999, Prime Minister Eman and Minister Junior Croes traveled to Miami-Dade County, Florida, on a trip arranged by Minister Junior Croes to personally inspect the Homestead Motors-ports Speedway and for further meetings with Mr. Sanchez.
16. On the following day, after having visited the Homestead Motorsports Speedway, a meeting was held at the Ocean Reef Club in Key Largo, Florida, attended by Prime Minister Eman, Minister Junior Croes, Ms. Alice Von Romondt, the permanent secretary to the Council of Ministers of the GOA, Mr. Sanchez and Peter J. Yanowitch, legal counsel for Mr. Sanchez, MAI and SMG. At that meeting Prime Minister Eman solicited the involvement of Mr. Sanchez to develop a motorsports racetrack with world-class auto racing in the country of Aruba. The representatives of the Government of Aruba were enthusiastic over seeing the Miami Grand Prix races being run during their visit to Homestead and the tremendous potential of the project for Aruba. Prime Minister Eman described the country of Aruba as a politically stable country with an extensive tourism industry, and as a perfect location for a new motorsports race track facility. The Prime Minister Eman told the group that the GOA did not have anyone who had any experience with projects of this nature or with the ability to undertake such a large-scale and important project without the participation and assistance of an established racing promoter with expertise in the motorsports industry, such as Mr. Sanchez and his companies, SMG and MAI.
17. During the meeting Prime Minister Eman stated that he wanted the racetrack built in the San Nicolas area of Aruba, a sparsely developed part of the island, away from the tourist impacted, heavily developed hotel area. Prime Minister Eman explained that the GOA viewed the race track project as very important because of the economic benefit it would bring to the poor people of the San Nicolas area. The Prime Minister described the San Nicolas area as underdeveloped economically and lacking a key economic engine to bring prosperity to the area. He explained that he wanted to fulfill a promise he had made in the previous election to the people of San Nicolas to bring a major economic development project to their area. Prime Minister Eman acknowledged the difficulties of developing such a large scale project in San Nicolas but promised that the GOA was prepared to commit more financial support for the investors in a project developed in San Nicolas, than if the project were located in the more developed areas of the island. Prime Minister Eman assured Mr. Sanchez that the GOA was fully committed to provide the necessary financial support to develop the race track project if Mr. Sanchez, SMG and MAI agreed to take part in a business venture to develop the motorsports facility and locate it in San Nicolas. At no point during the meeting did Prime Minister Eman indicate that the GOA would establish any preconditions for the financial support to be extended, other than for Mr. Sanchez to commit to bring motorsports races to the facility.
18. Prime Minister Eman further told Mr. Sanchez that if he would agree to become involved in the project and locate the race track in San Nicolas, the GOA would, among other things, provide the necessary land for the project at little or no cost and provide tax holidays and other economic incentives.
19. The parties discussed the Prime Minister’s concern over whether Aruba could persuade the United States motors-ports sanctioning organizations to sanction races in Aruba. Mr. Sanchez explained that the sanctioning organizations would be reluctant to agree in advance to sanction races at a racetrack which had not yet been built, but that he would, as part of his undertaking, agree to secure those sanctions and racing dates from the sanctioning organizations.
20. Mr. Sanchez expressed concern about his fees and how they would secured, especially since there was a possibility of a change in the government through upcoming elections. He told Prime Minister Eman and Minister Junior Croes that he would want his fees guaranteed. Prime Minister Eman and Minister Junior Croes agreed that Mr. Sanchez was entitled to assurances in this regard. However, Minister Junior Croes explained that they could not use the word “guarantee,” because the use of this term was politically sensitive in Aruba. Prime Minister Eman explained that they could reach the same result through the use of a “letter of comfort,” a term new to Mr. Sanchez. The Prime Minister said “in order for us to give you a guarantee, we will have to go through Parliament and it will be a nightmare. How about a letter of comfort?” He went on to explain that a letter of comfort was like a bank check — you get the money in 30 days.
21. Following this meeting, Mr. Sanchez started contacting various United States sanctioning organizations, including CART, American Le Mans, and SCCA, to determine whether they might be interested in working with Mr. Sanchez and his companies to sanction races in Aruba. He also started to put together his staff, which consisted of numerous people who had worked with him on the Miami Grand Prix and the Homestead Motorsports Speedway, as well as the team of architects and engineers who would be necessary for the project. In early June, he traveled to Aruba with the architect, Willy Bermello, the principal of Bermello, Ajamil & Partners, and with engineer Jim Mock. They went to the San Nicolas area and looked at possible sites for the racetrack. They also met with various government officials, including Minister Junior Croes and Senator Glenbert Croes, to discuss the land and tax holidays they would need to receive from the GOA. Minister Junior Croes assured them that none of these issues were a problem.
The Letter of Intent
22. On June 30, 1999, a meeting was held in Aruba relating to the project. This meeting was attended by Mr. Sanchez, representing MAI and SMG, the GOA, represented by various GOA officials, Westland Properties, Inc. (“WEST”), the Aruban company serving as the local developer and promoter of the project and headed by Mr. Carlo R. Mansur, the construction contractor Calmaquip/Albo (“JVC”), which had recently completed the construction of Aruba’s new international airport facility, represented by Raul Gutierrez and Henk Bijan, and the construction architect B & A Latin America, Inc. (“BAL”), a subsidiary of Bermello, Ajamil & Partners, represented by Mr. Bermello, which had designed the Homestead Mo-torsports Speedway, (collectively “the Project Partners”).
23. Before the meeting the discussions between Mr. Sanchez and the GOA recognized that Mr. Sanchez and his companies would be service providers, not investors in the project. Their role would be to obtain sanctioning agreements and racing dates from the United States sanctioning organizations, to work on the design and construction of the racetrack, to get the sanctioning organization’s approval to that design, and to provide the expertise necessary to actually run the races at the racetrack. All parties understood that the role of Mr. Sanchez and his companies in the design and construction of the racetrack was important. The sanctioning organizations had to approve every aspect of that design and construction because the lives of the. drivers and those on the track was at stake. Mr. Sanchez’ expertise and his relationship with the sanctioning organizations would facilitate and assure that approval. The GOA’s role would be to provide the necessary financial incentives and support for the project. The Mansur family, a wealthy Aruban family, would be the project’s developer.
24.However, at the June 30, 1999 meeting Prime Minister Eman shifted the GOA’s approach to the project and demanded a new approach whereby each of the participants, including the GOA, would become a shareholder in a company to be formed by parties to develop and operate the motorsports facility. The Prime Minister explained that this approach had been used to develop the Hyatt Hotel in Aruba, in which all parties would share the risk in the venture by becoming shareholders and joint venture partners in a corporation and providing the funding for the corporation. He therefore referred to it as the “Hyatt model.” Minister of Finance Tico Croes explained that this approach, in which the GOA became a shareholder in the company, made the project stronger because the GOA would never permit any company in which it invested to “go under.” Initially, Mr. Sanchez objected to this change. The Prime Minister said that the GOA would invest $3 million in equity as a shareholder and told Mr. Sanchez, and the architect and engineer to put up $1 million equity. Mr. Sanchez testified that although he did not want to become an investor, away from Miami, he ultimately agreed that he would invest $1 million in equity. The architect and engineer objected, but ultimately agreed to contribute $500,000. Mr. Mansur owned 100% of the project at the beginning of the meeting and either 30 or 35% at the end. At the meeting, there was no discussion or agreement that any of these capital contributions were contingent or dependent on any proposed budget by Mr. Sanchez or his companies.
25. At the meeting, Mr. Sanchez explained that for the racetrack project to be feasible and viable, it would be necessary for him to sign agreements with the United States sanctioning organizations for more than one year. Mr. Sanchez explained that because the company to be formed to develop the project might not be able to meet its obligations to him for these sanctioning agreements after the first year, he needed assurance or support from the GOA that these obligations would be met. The GOA did not object to providing this support or assurance.
26. The next day, July 1, 1999, the parties met in the Council of Ministers meeting room to review a draft agreement which had been prepared overnight. The draft agreement did not contain any provision giving Mr. Sanchez or his companies the support or assurance which he required from the GOA for obligations after the first year. Mr. Sanchez and Mr. Man-sur complained to Prime Minister Eman. Mr. Mansur told Prime Minister Eman that he and his family’s companies would not participate in the project without that support or assurance by the GOA. Prime Minister Eman called Mr. Sanchez, Mr. Mansur and Finance Minister Croes into his private office. In that meeting, Prime Minister Eman agreed to insert that provision in the draft agreement.
27. A new draft of the agreement, was prepared. It was signed by the Project Partners, including the GOA, on July 1, 1999. It is referred to as the “Letter of Intent” and is in evidence as Pl.Ex. 9 and Def.Ex. 107. The Letter of Intent was subsequently ratified at a meeting of the GOA’s Council of Ministers.
28. The Letter of Intent provided for the formation of an Aruban company (initially named “ARUCO” and later changed to “Colorado Hills, N.V.”) to develop and operate the motorsports facility (“the Aruba Motorsports Complex”) and required each of the Project Partners to make respective capital contributions. The GOA and SMG were obligated to make capital contributions of $3,000,000 and $1,000,000, respectively. Under the Letter of Intent, these obligations were not contingent or dependent on any proposed budget by Mr. Sanchez or his companies. Mr. Carlo Mansur was appointed as the Managing Director of Colorado Hills, and therefore he had the primary responsibilities for running the company.
29. The Letter of Intent contemplated that MAI would negotiate with, and obtain from United States motorsports sanctioning bodies the rights to hold at least four major racing events at the Aruba Motors-ports Complex, and that it would be paid approximately $4,250,000 a year for securing those commitments. The sanctioning bodies are organizations in the United States responsible for organizing the races, establishing safety arid racing criteria, and awarding points and money to successful drivers. The Letter of Intent provided that ARUCO would secure a letter of credit for the benefit of MAI to secure the payments due to MAI, that this letter of credit would be for no more than $4,250,000 to secure the payments due to MAI during the first year of operation, and that thereafter this letter of credit would be “irrevocable and revolving from year to year.” This language (“irrevocable and revolving from year to year”) was the language which was inserted after the initial draft of the agreement was prepared; it was inserted to meet Mr. Sanchez’s and Mr. Mansur’s concern about support from the GOA after the first year. In the Letter of Intent; the GOA also committed to “provide whatever is necessary to assist ARUCO” in performing these obligations for the benefit of MAI.
30. The Letter of Intent further required the Project Partners to “negotiate and execute all further appropriate and necessary legal agreements in good faith.” Id. at ¶ 10.
31. The Letter of Intent was not a complete or final agreement between the parties. Prime Minister Eman, Mr. Sanchez and Mr. Mansur have each testified that the Letter of Intent was not intended to be a complete or final agreement between the parties. (5/21 Tr.Trans. at 124-25). Prime Minister Eman testified that “I can think of ten other conditions” that were not in the letter of intent; (5/30 Tr.Trans. at 36). Mr. Sanchez testified: “This was just a letter of intent... .We intended to sign another agreement with more detail. That was how I received this agreement.”; (6/3 Tr.Trans. at 67-68). Mr. Mansur testifies that “as a result of this document, further agreements and documents would be executed and put in place”.
32. During the negotiations, both Prime Minister Eman and Minister Tico Croes assured Mr. Sanchez that the GOA was prepared to provide whatever financial assurances were necessary to satisfy MAI’s requirement that the GOA would back ARUCO’s obligation to pay MAI’s fees for securing the racing series rights. These assurances were consistent with the Letter of Intent, which provided that the GOA would “provide whatever is necessary to assist ARUCO” in guaranteeing its obligations to MAI. Prime Minister Eman promised Mr. Sanchez that the GOA would issue a “letter of comfort” assuring the payment of such fees to MAI by ARUCO. Without these assurances, 'Mr. Sanchez, SMG and MAI would not have participated further in the project. Finally, Prime Minister Eman asked Mr. Sanchez to move forward and finalize the details of the agreement between his companies and ARUCO (Colorado Hills) so that the racetrack would be ready for the 2000 racing season.
The Letter of Comfort
33.During trial, Prime Minister Eman testified that he told Mr. Sanchez, on numerous occasions, that he would issue a letter of comfort supporting the project. (5/21 Tr.Trans. at 32). Plaintiff, GOA now takes the position that they never promised Mr. Sanchez or MAI a letter of comfort, which would assure Colorado Hills’ obligations to MAI. Instead, the GOA contends that Prime Minister Eman only promised a letter of comfort which would indicate the GOA’s support for the project.
The clear facts, from the testimony of competent and truthful witness, impel a factual finding to the contrary. Putting aside the testimony of the interested witnesses, Mr. Sanchez, who has a financial interest with respect to this issue, and Prime Minister Eman and Finance Minister Croes, who have a political and personal interest with respect to this issue; the Court finds persuasive the testimony of Minister Junior Croes, the minister directly involved on the racetrack project, Mr. de Meza, the GOA’s own representative to Colorado Hills, and Senator Glenbert Croes, a leader of Parliament. Each of these individuals testified that Prime Minister Eman promised Mr. Sanchez a letter of comfort which would assure Colorado Hills’ financial obligations to MAI. The Court carefully observed the demeanor of each of these witnesses and finds them credible. Each person’s testimony in this regard is contrary to their personal political interests and the interests of their country. For those reasons, the testimony of each is particularly persuasive.
34. In addition, even though Mr. Sanchez and his companies were never provided with the promised letter of comfort, Mr. Sanchez and his companies continued full support for the development of the project. When asked whether Mr. Sanchez kept working toward the development of the project during that time, Prime Minister Eman responded: “All of them did .... Everything was going forward to making that project become a reality in the following year.” (5/21 Tr.Trans. at 205-06).
The CMB Bank Guarantee
35. Shortly after execution of the Letter of Intent, Mr. Mansur undertook to fulfill ARUCO’s obligation under the Letter of Intent to establish a letter of credit, for the benefit of MAI, to guarantee ARU-CO’s obligations to MAI for sanctioning fees. Mr. Mansur, who was appointed as the Managing Director of ARUCO by all the shareholders, including the GOA, applied to the Aruban Caribbean Mercantile Bank (“CMB”) for this purpose. The Minister of Finance Tico Croes accompanied Mr. Mansur to the banks, supporting his efforts to obtain the money ($4.5 million) for the project. They were unsuccessful in getting the essential letter of credit. (5/22 Tr.Trans. at 45). The bank refused to issue a letter of credit to ARU-CO (Colorado Hills) unless GOA guaranteed the letter of credit and Mr. Mansur and his father providing US$1,000,000 in collateral. Mr. Mansur went to the GOA requesting a $3 million guarantee to obtain the $4.5 million letter of credit from the bank. He also called upon the ARU-CO (Colorado Hills) shareholders to deposit further equity contributions. Pursuant to its obligation under the Letter of Intent to “provide whatever is necessary to assist ARUCO [Colorado Hills],” the GOA agreed to provide that guarantee through a $600,000 cash collateral pledge and through a “letter of comfort” to CMB.
36. On July 21, 1999, Peter J. Yano-wieh, the attorney representing MAI, sent a letter to Finance Minister Tico Croes, outlining the procedures which would be followed by MAI in drawing against the $4.5 million CMB letter of credit. (PI. Ex.13, Def.Ex.108). Attached to the Ya-nowitch July 21,1999 letter was a “projected budget” setting forth the anticipated amounts to be paid from the $4.5 million letter of credit. Prime Minister Eman never saw the July 21, 1999 letter or budget and did not speak to anyone about it. With respect to the “projected budget,” he acknowledged that “I didn’t really pay attention, not then and not before that.” (5/21 Tr.Trans. at 133). The only GOA official who testified that he actually read the- letter and budget was Finance Minister Tico Croes. He reviewed both the conditions set forth in the letter under which MAI would be entitled to draw funds from CMB and the “projected budget.” The Plaintiff, GOA, relies heavily upon the testimony of Finance Minister Tico Croes wherein he states (5/22 Tr. Trans, at 71) that he relied upon the Ya-nowitch letter and proposed budget (PI. Ex.13) in providing, on behalf of the GOA, the $3 million guarantee to the Caribbean Mercantile Bank N.V. on July 22, 1999 (Pl.Ex.37C). This testimony is in clear contradiction to the sworn deposition testimony taken October 17, 2001 where he repeated several times, with reference to the Letter of Intent “I did not know what the Letter of Intent meant.” He had no clear understanding of the conditions set forth in the letter under which MAI would be entitled to draw funds from CMB, and was unable to explain how those express conditions had anything to do with the “projected budget.” Indeed, he conceded that the express conditions set forth in the letter under which MAI would be entitled to draw funds from CMB made no mention whatsoever of the “projected budget.”
The Court is unable to determine why this “projected budget” was sent, since there is no reference to it in the Letter of Intent or in any of the documents relating to the CMB Bank Guarantee. The evidence is clear that the GOA did not rely on this July 21, 1999 (Yanowitch) letter or the “projected budget.” At that point in the proceedings, the GOA was represented by American counsel Winston & Strawn, who advised Minister Tico Croes when he prepared the bank guarantee and the letter of comfort.
Given the fact that (1) Prime Minister Eman never saw (and therefore could never have relied upon) the Yanowitch letter and budget, and (2) the clear contradiction in the sworn testimony of Finance Minister Tico Croes where he repeatedly stated in his sworn deposition that he did not know what the provisions of the Letter of Intent and the bank guarantee meant, the Court concludes that his sworn testimony at trial that (a) he “relied” on the July 21 letter and budget in issuing the GOA’s guarantee to the bank; and (b) that “MAI had not performed all of the conditions permitting it to draw upon the guaranteed funds posted at the Caribbean Mercantile Bank in Aruba” (5/22 Tr.Trans. at 151-86) is not credible. The Court therefore finds that the GOA and its primary officials acting for the government on this matter, the Prime Minister and Minister of Finance, did not rely upon the Yanowitch letter or the projected budget.
37.The credibility of Finance Minister Tico Croes was further placed in doubt when he testified that MAI had not performed all of the requirements in the Letter of Intent and other documents permitting the withdrawal of the $4.5 million bank guarantee (Counter-Pl.Ex.115) in that “... MAI had not performed the prerequisite requirements.” (5/22 Tr.Trans. at 151-86). This testimony is simply not believable. The requirements were:
“I warrant and confirm to you that MAI will utilize the following procedures in drawing upon these guaranteed funds, which procedures I understand to be satisfactory to you:
With respect to those payments for the acquisition of events, MAI will forward to Aruco, N.V. an invoice and a letter of representation from the applicable United States sanctioning organizations which will provide the following representations: (i) MAI has concluded an agreement with the respective sanctioning organization; (ii) MAI has complied with the financial requirements under the licensing/sanctioning agreement to secure the race date; (iii) the United States sanctioning organization has guaranteed MAI the right to hold a race date on its calendar for the Fall/Winter of the 2000 race season; and (iii) MAI will invoice Aruco, N.V. for such expenses, and shall obtain approval of such invoices from the Managing Director of Aruco, N.V. (Which shall be paid in accordance with the MAI/Aruco, N.V. agreement) prior to submitting such invoices for payment from the guaranteed funds.”
38. Clearly, MAI had performed each of the requirements set forth in (i), (ii), (iii) and (iii).
39. Recognizing that the GOA’s obligation was to “provide whatever is necessary to assist ARUCO,” Finance Minister Croes wrote to Mr. Mansur, on behalf of Aruba, on July 22, 1999, and detailed the conditions under which the GOA would issue a “letter of comfort” for the CMB letter of credit. (Pl.Ex.16, Def.Ex.114). None of those conditions had anything to do with the procedures set forth in Mr. Yanowiteh’s July 21, 1999 letter or the “projected budget” attached to that letter. None of those conditions had anything to do with the financial arrangements between MAI and the sanctioning organizations. With respect to MAI and the sanctioning organizations, the only concern evidenced by the GOA in this July 22, 1999 letter was that the GOA would issue its letter of comfort to CMB only if it had adequate assurance that MAI would obtain the sanctioning agreements that had been promised. As detailed below, MAI fully performed in that regard.
40. The conditions to the GOA’s letter of comfort outlined in its July 22, 1999 letter were ultimately agreed to by Mr. Mansur, acting on behalf of ARUCO, when he countersigned that letter. The GOA never asked Mr. Sanchez or MAI to sign the July 22, 1999 or to agree to its provisions. Again, this is consistent with the fact that the GOA’s obligation under the Letter of Intent was to “provide whatever is necessary to assist ARUCO.”
41. Significantly, the GOA’s July 22, 1999 letter stated that its agreement to provide a letter of comfort to CMB would be in “complete satisfaction” of its obligations under Paragraph 5 of the Letter of Intent. The Letter of Intent, however, involved numerous parties, including Mr. Sanchez, MAI and SMG. The GOA, however, never sent the July 22, 1999 letter to the parties who had executed the Letter of Intent. The parties to the Letter of Intent, including Mr. Sanchez, MAI and SMG, never agreed that the GOA’s letter of comfort to CMB would be in “complete satisfaction” of its obligation under Paragraph 5 of the Letter of Intent. Instead, the July 22, 1999 letter shows that the GOA attempted to unilaterally modify its obligations under the Letter of Intent.
42. On July 22, 1999, the GOA issued a “letter of comfort” to CMB. (Pl.Ex.206, Def.Ex.113). The letter of comfort provided that the GOA “will, without any reservations whatsoever, agree to any and all payments that Caribbean Mercantile Bank has to make or has made under aforementioned guarantee” up to US$3,000,000. The letter of comfort was signed by Prime Minister Eman and Finance Minister Croes.
43. On July 22, 1999, CMB informed Mr. Mansur, as Managing Director of ARUCO (Colorado Hills), in writing that it had approved ARUCO’s (Colorado Hills’) credit application for US$4,500,000. (Def.Ex.110). The letter made clear that Mr. Mansur and ARUCO (Colorado Hills) were both jointly and severally liable for the full amount of the loan. It also stated that the loan would be secured by a cash deposit by the GOA of Afl. 1,000,000 (approximately US$600,000); a bank guarantee of US$1,000,000 by Ruben Mansur, Mr. Mansur’s father, and a guarantee by the GOA to CMB for US$3,000,000.
44. On July 23, 1999, CMB issued Bank Guarantee 965. (Pl.Ex.20, Def. Ex.115). ARUCO (Colorado Hills) was named as principal and MAI was named as beneficiary in that bank guarantee. The guarantee set forth certain conditions for payment to MAI. None of those conditions had anything to do with the “projected budget” attached to Mr. Yanowiteh’s July 21, 1999. Instead, payment under the guarantee was conditioned on the payment conditions set forth in Mr. Yanowitch’s July 21,1999 letter, i.e., (i) MAI concluding agreements with the respective sanctioning organizations; (ii) MAI has complied with all financial arrangements required by those sanctioning organizations; (iii) the sanctioning organizations have guaranteed racing dates for the Fall/Winter 2000 race season; (iv) MAI has submitted “an invoice for such expenses” to ARUCO, and (v) the Managing Director of ARUCO has approved those invoices. The GOA agreed to these conditions in its July 22, 1999 letter to ARUCO. (Pl.Ex. 16, Def.Ex. 114).
45. The GOA never required, as a condition to any payment to MAI under the CMB bank guarantee or the GOA letter of comfort to CMB, that it be provided with the sanctioning agreements between MAI and the sanctioning organizations or other financial agreements between MAI and those organizations. The GOA never required, as a condition to any payment to MAI under the CMB bank guarantee or the GOA letter of comfort to CMB, that it be provided with the agreement between MAI and ARUCO. Instead, the GOA only required that the MAI invoices be approved by Mr. Mansur, the Managing Director of ARUCO (Colorado Hills), which approval he gave to each invoice.
46. The parties ultimately decided to use the name “Colorado Hills” for the joint venture, rather than “ARUCO.”
The Colorado Hills Agreement
47. Historically, the professional mo-torsports sanctioning organizations have been reluctant to stage racing events in a foreign country such as Aruba because of the inability to find foreign promoters with experience in promoting races, because of the uncertainties in dealing with local governments and their politicians and because of language barriers. Moreover, some mo-torsports sanctioning organizations, had suffered negative experiences in the past, including financial losses, in undertaking agreements with promoters seeking to stage racing events at race tracks not yet built, because the race tracks were either never built, were not built on time or were not built according to their safety specifications.
48. Since Colorado Hills was unknown to the motorsports industry, located in a foreign country, and with a yet-to-be-built race track, all the participants in the project, including the GOA, knew that the motorsports sanctioning organizations would be unwilling to deal directly with Colorado Hills, but instead would only work with Mr. Sanchez and his companies. It was therefore necessary for Colorado Hills to enter into an agreement with MAI and SMG for this purpose. The parties envisioned this role for MAI and SMG in the Letter of Intent.
49. In reliance on the representations made by the GOA to Mr. Sanchez, MAI and SMG that it would issue a “letter of comfort” guaranteeing MAI’s fees for the acquisition of the racing events, on July 29, 1999, SMG and MAI entered into the Aruba Motorsports Venture Letter Agreement with Colorado Hills, N.V (“The Colorado Hills Agreement”). (Pl.Ex.22, Def. Ex.182). A prior draft of the Colorado Hills Agreement, with essentially identical terms, was presented at the first shareholders’ meeting of Colorado Hills on July 9, 1999, whose GOA attendees included, Mr. Mike de Meza, the representative of Minister Junior Croes, and Carlisle de Coteau, the representative of Finance Minister Tico Croes. The shareholders authorized Mr. Mansur to execute the agreement for Colorado Hills as its authorized representative and Managing Director. After it was executed, Mr. Man-sur personally delivered a copy of the Colorado Hills Agreement to Finance Minister Croes and Minister Junior Croes. Copies of the Colorado Hills Agreement were filed in the official records of the Chief of Staff to the Minister of Finance (Def.Ex.183) and the Central Accounting Office of the Ministry of Finance. (Def.Ex.609).
50. The Colorado Hills Agreement set forth the terms under which Colorado Hills, SMG and MAI, agreed to proceed to design, develop, and operate the Aruba Motorsports Complex. The agreement was for an initial contract term of ten years, and automatically renewed for successive terms of ten years.
51. The Aruba Motorsports Complex was initially envisioned as a 2.7 miles, 14 turn road course, to be built to international safety standards, and scheduled for completion in September 2000.
52. The Colorado Hills Agreement provided MAI was to “act as the master sanctioning body for events held at the Aruba motorsports facility and sanctioned in conjunction with United States sanctioning bodies. Such sanctioning bodies could include the Championship Auto Racing Teams (‘CART’), Sports Car Club of America (‘SCCA’), the American Motorcyclist Association (‘AMA’), American Le-Mans Series CALS’), the Southern Vintage Racing Association (‘SVRA’), and the National Hot Rod Association (‘NHRA’), among others.” As part of its responsibilities MAI was to be “exclusively ... responsible for interfacing with the various professional sanctioning bodies and for: (i) interpreting their requirements with respect to the design and construction of the Aruba motorsports facility; (ii) conducting negotiations with respect to the motors-ports events to be held at the facility; and (iii) coordinating the operation of such events with the sanctioning bodies.” In exchange for these services, MAI was to receive $4,500,000 per year, increasing 8.5% annually.
53. According to the Colorado Hills Agreement, SMG was to provide two separate services. It was to act as the consultant for the design and construction of the Aruba Motorsports Complex. It was also to act as a consultant in the promotion and operation of the Aruba Motorsports Complex. SMG’s responsibilities in this regard including all phases of the racetrack’s operation, including “booking of events; supervision of the racing and non-racing activities during event weekends; supervision of sales of food and beverage, corporate hospitality, signage and tickets, advertising, promotion and marketing of events.” SMG was to receive from Colorado Hills $1,800,000 for fees and expenses for the project’s development and thereafter $1,700,000 annually plus an additional $300,000 annually commencing in year two for transportation expenses.
MAI Obtains Sanctioning Agreements And Seeks Payment
54. Immediately after signing of the Letter of Intent on July 1, 1999, Mr. Sanchez undertook to fulfill MAI’s obligation to the GOA and to Colorado Hills. He immediately started working on the design of the racetrack together with the architects and engineers in order to get the racetrack completed by November 2000. He worked together with the sanctioning organizations on this design so that they would ultimately approve it. He continued to work on assembling his staff. In August, he began putting together the television team and prepared for the international press conference to be held at the end of the following month.
55. In addition, Mr. Sanchez undertook to fulfill MAI’s obligation with respect to negotiating and obtaining sanctioning agreements from the various United States sanctioning organizations and commitments from those various organizations for specific race dates to stage races in Aruba. He traveled to various locations in the United States for that purpose.
56. On July 27 and 28, 1999, Mr. Sanchez traveled to Aruba and met with Prime Minister Eman, Finance Minister Tico Croes and Carlo Mansur. Mr. Sanchez told them that he had been successful in obtaining oral agreements from some of the sanctioning organizations. He advised them, however, that at least two of the sanctioning organizations, SCCA and CART, were concerned about the fact that the proposed races were overseas; they did not want to have to sue a foreign government or local promoter to force them to live up to their agreements. Mr. Sanchez explained that he would be willing to guarantee performance to these organizations, not just for the first year of races, but for races beyond the first year, but to do so he needed the GOA to provide him with the letter of comfort which it had promised. The performance to which Mr. Sanchez referred was substantial. It required the transport of all race cars and equipment to and from Aruba, the transport of 300 to 500 people and their food and lodging, the provision of helicopters, ambulances, medical equipment and arrangements with hospitals. These expenses would cost between $800,000 and $1,000,000 per event, in addition to the sanction fees. Mr. Sanchez or his companies would be required to meet these obligations if Colorado Hills, a startup company, was unable to do so. Prime Minister Eman promised that the GOA would provide the letter of comfort and directed Mr. Sanchez to sign the sanctioning agreements. Prime Minister Eman told Finance Minister Croes to get the letter of comfort issued as soon as possible and directed Mr. Mansur to provide him with a draft of the letter of comfort. Prime Minister Eman told Mr. Sanchez and Mr. Mansur that he would have the letter of comfort for Mr. Sanchez within two weeks and then would get any necessary approval from Parliament.
57. At the conclusion of the meeting Prime Minister Eman asked Mr. Sanchez to immediately organize press conferences to announce the Aruba Motorsports Complex project and the scheduling of the races. Everyone agreed that an Aruban domestic press conference would be held in August of 1999, and that an additional press conference would be organized in September of 1999 to introduce the international press to the project and to the island of Aruba.
58. Thereafter, Mr. Yanowitch and Mr. Mansur’s attorney prepared a draft of the letter of comfort, dated July 29, 1999. (PI. Ex.23). Mr. Mansur personally delivered the draft to Prime Minister Eman and Finance Minister Croes. Prime Minister Eman read it and then handed it over to Finance Minister Croes and asked him: “Can you live with it? Can you defend it?” (5/31 Tr.Trans. at 59). Finance Minister Croes responded affirmatively. Mr. Man-sur communicated these conversations to Mr. Sanchez.
59. In furtherance of its support for the Aruba Motorsports Complex project and in order to induce MAI to enter into multi-year commitments with the motors-ports sanctioning bodies, on August 4, 1999, Finance Minister Tico Croes wrote a letter to Mr. Mansur indicating that the GOA “intend[ed] to remain a shareholder in Colorado Hills N.V.... for a period of at least five years.” (Pl.Ex. 29; Def.Ex. 123).
60. Mr. Sanchez testified that he relied on what Prime Minister Eman told him about the GOA providing a letter of comfort. As Mr. Sanchez explained, “That was the Prime Minister of the country.... This is like the number one person in the country. I believed him.” (5/29 Tr.Trans. at 63). In reliance on those promises, on August 3, 1999, MAI and SCCA Pro Racing Ltd. entered into a multi-year agreement for Trans-Am Series races, with the first to be held on November 10-12, 2000. On August 10, 2000, MAI and CART, Inc. entered into a multi-year agreement for Indy Lights races.
61. Each of the sanctioning agreements listed MAI as “promoter.” ■ Each of the sanctioning agreements obligated MAI, as promoter, to pay a substantial sanctioning fee, ranging, for the first year alone, from $221,000 to $500,000. In addition, each of these sanctioning agreements obligated MAI, as promoter, to undertake and provide substantial services, such as: providing for transportation of all race cars and racing equipment to Aruba, providing for transportation of all racing team personnel to Aruba, providing for storage of all racing cars and equipment in Aruba and providing for hotels for all racing team personnel in Aruba.
62. Pursuant to the Colorado Hills Agreement, MAI was entitled to receive from Colorado Hills its fee for the services it rendered in obtaining these sanctioning agreements and obligating itself to pay fees and perform substantial services pursuant to these agreements. MAI therefore submitted invoices for these fees to Carlo Mansur, as Managing Director of Colorado Hills. Mr. Mansur approved these invoices as appropriate for payment and directed Mr. George Dominicis, on behalf of MAI, to submit them to the Caribbean Mercantile Bank for payment. (Pl.Ex.38, 39, 40, 41; Def.Ex. 615).
63. As detailed above, the GOA, MAI and Colorado Hills all agreed on the conditions under which MAI would be entitled to payment from CMB. As expressly set forth in Mr. Yanowiteh’s letter to the GOA, and as expressly set forth in the CMB Bank Guarantee, the terms of which were agreed to by the GOA, MAI was entitled to payment from CMB on the condition that (i) MAI has concluded agreements with the respective sanctioning organizations; (ii) MAI has complied with all financial arrangements required by those sanctioning organizations; (iii) the sanctioning organizations have guaranteed racing dates for the Fall/Winter 2000 race season; (iv) MAI has submitted an invoice to Colorado Hills, and (v) the Managing Director of Colorado Hills has approved those invoices. For payments other than those related to the sanctioning agreements, these same documents only required (i) that MAI has submitted an invoice to Colorado Hills, and (ii) that the invoice has been approved by Mr. Mansur, the Managing Director of Colorado Hills.
64.Initially, the Caribbean Mercantile Bank refused to pay MAI’s invoices because the bank had some concern over whether the formal conditions of the GOA’s Bank Guarantee No. 956 (issued by Caribbean Mercantile Bank as the guarantor for Motorsports America, Inc. as the beneficiary) had been fulfilled. (6/4 Tr. Trans, at 92). When confronted with this serious problem, Finance Minister Tico Croes and Prime Minister Eman telephoned the Chairman of the Board of the Maduro Curiéis Bank, Mr. Lionel Capriles, at his home in Curacao. Mr. Capriles, Chairman of the Maduro Curiéis Bank that owned 100% of the shares of the Caribbean Mercantile Bank received two phone calls from Finance Minister Tico Croes and Prime Minister Eman after 9:30 p.m. on August 13, 1999. (6/4 Tr. Trans, at 93; 5/24 Tr.Trans. at 57-59). Mr. Ca-priles was familiar with the Bank Guarantee No. 965 that had been issued by his subordinate bank, the Caribbean Mercantile Bank in Aruba. He testified that when Prime Minister Eman came on the phone to demand that the funds be immediately released to MAI, the Prime Minister told him “there are omissions. We are in a desperate hurry to do this. You have to do this as a favor. Forget the omissions. We have other omissions. Don’t worry. We have to have the check because otherwise we lose, if I am not mistaken, the date.” (6/4 Tr.Trans. at 94). He further testified the Prime Minister told him; “But he asked me to, regardless of the omission, please see to it that it is paid. Forget the omissions, and that’s how it was... More than that, and that the Government would guarantee me if there is any claim because of that omission. He didn’t have to go into all of the details because I told you the next morning when I got to the bank, called Aruba, the letter with the omissions was there in place.” (6/4 Tr.Trans. at 94-95).
65. When Mr. Capriles was asked whether or not the GOA objected to any of the payments made by the Caribbean Mercantile Bank to MAI pursuant to the Bank Guarantee No. 965, he replied, “N-O. otherwise we would not have done the transaction. The fact that they called me to do it and the fact that they accepted both checks is proof enough. Otherwise they could have told us, don’t send me the check because we are not handling according to the conditions of the documents.” (6/4 Tr.Trans. at 96).
66. This testimony lends great credence to the testimony of Mr. Sanchez, MAI and SMG respecting the repeated promises of the Prime Minister and the Minister of Finance (and others in GOA) to issue the letter of comfort and the necessary financial guarantees to make the project successful. It clearly demonstrates, the length to which the Prime Minister was willing to pledge the credit to the GOA, by promising anything. Here, a totally believable independent witness was awakened in the middle of the night with a demand by the Prime Minister of Aruba that he call the officers of a subordinate bank to get checks issued to the Defendants under the Government’s guarantee, regardless of whether it met the formal requirements of the bank guarantee or not! If the Prime Minister was willing to do this, literally in the middle of the night, one can only assume that Mr. Sanchez’ testimony is correct when he relates numerous similar instances of promises made by the Prime Minister of Aruba on behalf of the Government.
67. When Mr. Capriles called CMB the next morning, he learned that all of the conditions of the CMB Bank Guarantee had been met. As he said, “and the next morning we did pay, but not because of the telephone of Mr. Eman, but because the omissions were corrected. So I killed two birds with the same stone.” The conditions that had been met were first, SCCA and CART each acknowledged in correspondence to CMB that they had entered into sanctioning agreements with MAI, that MAI had complied with the financial requirements of those agreements, and that they had guaranteed racing dates for the Fall/Winter 2000 race season. Second, MAI submitted invoices for its services in procuring these agreements to Colorado Hills. Third, Mr. Mansur, as managing Director of Colorado Hills, approved these invoices.
68. As a result, CMB properly determined that MAI was entitled to be paid under its Bank Guarantee. CMB issued a check in favor of MAI in the amount of $2,815,000, the amount to which MAI was entitled under the invoices which had been approved by Mr. Mansur, as Managing Director of Colorado Hills. CMB delivered this check to Finance Minister Croes, who ultimately arranged for its delivery to MAI.
69. On August 18, 1999, a domestic press conference was held in Aruba at which Prime Minister Eman publicly announced the Aruba Motorsports Complex project, and supported the project as being the spark that would start the economic development of the San Nicolas area. At the request of Prime Minister Eman, race car driver and racing promoter Emerson Fitipaldi appeared at the press conference to promote the Aruba racetrack and to promote the Latin American and Caribbean racing series that he and Mr. Sanchez were developing. During the press conference Mr. Sanchez again reminded Prime Minister Eman that he had not received the letter of comfort. The Prime Minister assured Mr. Sanchez that it was coming.
70. In late August, 1999, MAI and American LeMans Series, L.L.C. [“ALS”] entered into a multi-year agreement for LeMans races. Again, MAI submitted its invoice for services rendered in procuring these agreement to Colorado Hills. Mr. Mansur, as Managing Director of Colorado Hills, approved payment of that invoice and directed MAI to seek payment from the CMB Bank Guarantee. Again, all of the conditions to the CMB Bank Guarantee were met: ALS acknowledged in correspondence to CMB that it had entered into a sanctioning agreement with MAI, that MAI had complied with the financial requirements of that agreements, and that it had guaranteed racing dates for the Fall/Winter 2000 race season; MAI submitted invoices for procuring this agreement to Colorado Hills; and Mr. Mansur, as managing Director of Colorado Hills, approved these invoices. (Def.Ex.616). CMB properly determined that MAI was entitled to be paid under its Bank Guarantee. CMB issued a check in favor of MAI in the amount of $1,235,000, the amount to which MAI was entitled under the invoices which had been approved by Mr. Mansur, acting for Colorado Hills.
71. Aruba posed many challenges as a racing venue compared to the United States, including problems relating to: transportation of the racing teams, the absence of existing racing facilities, a difficult race site from a design and construction standpoint, and the lack of a suitable road system to San Nicolas to readily permit race team, participant and spectator access. All of these challenges, and many others, had to be overcome by Colorado Hills, MAI and SMG. On various occasions, Mr. Sanchez informed Prime Minister Eman and Minister Tico Croes that MAI and SMG would require the extensive investment of time and energy by Mr. Sanchez and his colleagues at MAI and SMG and the financial resources of MAI and SMG to overcome such challenges in order to complete and realize the project on a timely basis. The GOA officials repeatedly encouraged and induced Mr. Sanchez, SMG and MAI to make these substantial investments of time, energy and money. Of all of the Project Partners, only MAI and SMG had the requisite background and experience to design and build the Aruba Motorsports Complex to the satisfaction of the professional motorsports sanctioning organizations. The GOA fully understood that the burden to overcome the numerous obstacles posed for the project would fall primarily on MAI and SMG.
72. One of the most critical challenges of the Aruba Motorsports Complex project was to design and construct the facility in conformity with the requirements of the sanctioning organizations and prior to the scheduled races. The project was to be developed in the San Nicolas area of the country, a location that Prime Minister Eman understood lacked the infrastructure found in the more developed areas of the country. Nonetheless, Prime Minister Eman encouraged the parties to commence construction in San Nicolas as soon as possible.
73. The GOA knew that, due to the tight deadlines, any delays could jeopardize the success of the project by increasing the cost of construction and by missing the race deadlines. The Project Partners agreed that construction for the project would commence in early September, 1999.
On September 10, 1999, Colorado Hills had made the first call to SMG to make its first capital contribution of $200,000 to Colorado Hills. This payment was made directly to Colorado Hills by SMG. By this time SMG and MAI had expended substantial time and expenses towards the development of the Aruba Motorsports Complex.
Despite MAI’s and SMG’s performance of their obligations and Prime Minister Eman’s repeated promises, by late September of 1999 the GOA had yet to produce the letter of comfort it promised to Mr. Sanchez.
74. On September 20, 1999, a meeting was held in Aruba which was attended by Prime Minister Eman, Finance Minister Tico Croes, Minister Junior Croes, Mr. Sanchez, Mr. Yanowitch, Mr. Mansur and others involved in the motorsports project. At