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Entrepreneur Michael Lee-Chin bought a landfill site in the Dominican Republic almost five years ago, intending to develop a recycling centre and waste-to-energy plant on the property.

The plan to spin Caribbean garbage into gold is now the subject of a high-stakes legal standoff.

Mr. Lee-Chin, the Burlington, Ont.-based founder of money manager AIC Ltd. and chairman of a major Jamaican bank, filed a US$305-million lawsuit against the government of the Dominican Republic earlier this month, alleging that the military illegally expropriated his project. Politicians in the Caribbean country responded by calling the claim “absurd.”

The dispute pits the Dominican Republic’s government against a 67-year-old executive who began his career as a door-to-door mutual-fund salesman in Ontario and now owns businesses across the Caribbean. Mr. Lee-Chin holds stakes in National Commercial Bank Jamaica Ltd., a telecom company, hotels and a major Jamaica coffee producer. He sold AIC to insurer Manulife Financial Corp. in 2009.

The Dominican Republic project faced local opposition that began days after Mr. Lee-Chin took control in July, 2013, and continued for more than four years, according to documents filed by the Canadian executive’s lawyers as part of a request for an arbitration hearing. Mr. Lee-Chin alleges that the government cancelled contracts and “through the use of military force, took possession of the land and took over administration of the landfill.”

At various points in this long-running dispute, Mr. Lee-Chin alleges that government officials blocked the entrance to the landfill with dump trucks and with piles of garbage, refused to grant previously agreed upon fee increases and attempted to terminate his ownership over alleged breaches of environmental regulations.

Mr. Lee-Chin’s legal filings also allege that the Dominican Republic government engaged in “specious legal prosecution” against the project’s chief executive officer, Mr. Lee-Chin’s son. The lawsuit says: “While the criminal investigation was commenced, the matter has not been actively prosecuted since, evidencing its lack of legal support and intimating purpose.”

Mr. Lee-Chin is attempting to have his claim for US$305-million in damages heard at the Permanent Court of Arbitration in the Hague, under the terms of a 1998 free-trade agreement struck among a number of Caribbean countries, including the Dominican Republic.

The “landfill site management endangered the population of the city of Santo Domingo,” said a statement by the Embassy of the Dominican Republic in Ottawa. “The poor management forced the environment and health authorities of the Dominican Republic to declare this landfill site in a state of emergency,” the statement said, citing the risk of pulmonary diseases and other health problems.

Last week, Flavio Dario Espinal, a lawyer representing the Dominican Republic who is also a former ambassador to the United States for the Caribbean country, told local media that Mr. Lee-Chin’s claim was “absurd and without support.” Mr. Lee-Chin could not be reached Friday for comment.

The 875,000-square-metre landfill site − that’s 50 times the size of the Rogers Centre stadium and surrounding land − is near Santo Domingo, the capital and largest city in the Dominican Republic, with a population of more than two million.

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