A New York appeals court has affirmed a $1.6 billion award for the developer of a Bahamas mega project against various subsidiaries of China State Construction Engineering Corporation, the world’s largest construction company by revenue (see BML Properties, Ltd. v. China Construction America, Inc. et al., No. 6567550/17, 2025 WL 1033736 (N.Y. App. Div. Apr. 8, 2025)). The dispute involves construction of the Baha Mar beach resort complex in Nassau. After a series of delays that prevented the resort from opening as planned in March 2015, the developer BML Properties, Ltd., filed for bankruptcy and sued various state-owned entities, including the minority investor, prime contractor, construction manager, and others for breach of contract, fraud, and alter ego theories. After an 11-day bench trial, the lower court pierced the defendants’ corporate veils and awarded the developer $845 million for the loss of its entire investment plus prejudgment interest of $830 million.
The appellate court affirmed. As to veil piercing, the court held that the prime contractor entity exercised complete domination over the other defendants in order to breach the investor agreement, defraud the plaintiff, and cause the collapse of the project. The court also found that the minority investor entity failed to act in the best interests of the project. This included stripping manpower and resources from the project, diverting funds from the project that were meant for subcontractors, and causing or authorizing delays. These breaches of the investor agreement prevented the resort from opening and resulted in the loss of the developer’s entire investment. The appellate court also affirmed the lower court’s fraud finding based on internal communications showing that the construction manager entity knew that a March 2015 opening date – as represented to the developer – was impossible. The appellate court held that these misrepresentations regarding the defendants’ ability to perform were sufficient to support a finding a fraud.
A copy of the court’s decision is available here. The 2,200 room Baha Mar beach resort did eventually open in 2017 at a total estimated cost of $4 billion.