Chastanet files urgent court injunction to halt controversial Galaxy CIP applications in Saint Lucia

The former Prime Minister of Saint Lucia and the current Opposition Leader Allen Chastanet on February 20 has filed an urgent interlocutory injection to suspend certain parts of the country’s Citizenship by Investment Programme (CIP) amid alleged systematic violations under current Investment Minister Ernest Hilaire.

Reportedly, this marks the second legal challenge against Saint Lucia’s CIP within a year. Earlier in May 2024, MSR Media’s RICO lawsuit also named several Caribbean CBI officials including Hilaire as defendants however, this case was later withdrawn by MSR in December 2024 due to immunity claims.  

Sources claim that the current case filed by Chastanet challenges three main aspects of the Saint Lucia’s CBI Programme. The application specifically targets an agreement between the CIP Board and Caribbean Galaxy Real Estate Limited which he alleges authorizes at least 200 successful applications each month with a cap of 5000 applications over 24 months. This marks a significant increase from the 700 applications which is reported to have been originally approved by the government for the company’s Canelles Resort Project. 

According to the Opposition Leader, the government has failed to reveal the exact number of shares presently allocated to Galaxy, but the developer had initially asked 9,160 shares at $300,000. He added that in 2021, Caribbean Galaxy has asked to revise their share allocation, alleging an expanded project scope as well as increasing construction costs after COVID-19.  

Chastanet emphasised that his administration had approved Galaxy as a CIP developer and created regulations enabling the company to build escrow accounts abroad.  

The injunction further challenges the implementation of a new "Infrastructure Option" and the approval of specific Enterprise Projects without proper regulatory frameworks. Chastanet argues that these approvals were made without following the required procedures and guidelines, resulting in substantial financial losses. 

Singapore based firm slams Saint Lucia’s business environment

Amid these allegations, a representative from a Singapore-based company ‘SCH Global’ has also slammed Saint Lucia’s unfavourable business environment and has announced plans to move its business from Saint Lucia to St Kitts and Nevis. 

“I simply do fund options like St Kitts and Nevis’ Sustainable Island State Contribution (SISC) and I do not go for big commissions because SISC is the quickest and fastest way to get citizenship,” he said. This clearly shows that the situation has prompted the right agents to consider moving their business to St Kitts and Nevis.

Hilaire calls allegations baseless

On the other hand, Ernest Hilaire has termed this whole arrangement as a Wild West, but Chastanet is maintaining that his government maintained full access to the financial records of the accounts.   

Notably, to secure the injunctions, the Opposition Leader must show to the court that the CIP approvals exceeded the government’s authority and breached the existing laws including the Citizenship by Investment Act and public procurement laws. 

Chastanet claims CBI underselling was in practice

Chastanet's recent court filing alleges that the government's violations of the Citizenship by Investment Act resulted in significant financial losses. Specifically, he claims that citizenships were sold for $65,000, which is substantially lower than the legally required minimum of $200,000. 

His application seeks two main orders from the court. Firstly, he wants to restrain Minister Hilaire from approving citizenship applications for Galaxy's real estate projects and the so-called "Purported Enterprise Projects". Secondly, he aims to prevent the Citizenship by Investment Board (CIP Board) from processing these applications until the trial is concluded. 

Furthermore, a program freeze could materialize through three channels including the court’s injunction, parliamentary action and a CIP Unit administrative decision.  

Parliamentary intervention in the Citizenship by Investment Program (CIP) controversy would involve creating new legislation, a process that could be lengthy and complex. On the other hand, the CIP Unit has the authority to suspend approvals if there are concerns about compliance. 

The recent court filing by Allen Chastanet particularly challenges the approval of two projects: Galaxy's National Infrastructure Programme and Bemax LLC's Rock Hall Housing Development Project.  

Experts now anticipate that the court's decision on Chastanet's injunction request will have significant implications for the CIP programme and its applicants citing ‘If the court grants the injunction, it could potentially affect around 5,000 applications, given the backlog in processing times that has stretched to over 14 months’.