General's case against allowing a McDonald's restaurant to open its doors in Bermuda.

Mr. Diel told Puisne Judge Vincent Meerabux that what Attorney General Elliott Mottley called "a letter of intent'' between Bermudian interested parties and McDonald's in the US was a valid contract.

And he insisted that the letter constituted a contract -- and property under the law.

Mr. Diel was speaking on the last day of four days of evidence in Grape Bay Ltd's bid to have the Prohibited Restaurants Act 1997 set aside.

At the close of evidence, Mr. Justice Meerabux said he would reserve his judgement on the matter to a later date.

Earlier, Mr. Diel launched a Big Mac attack on Mr. Mottley's arguments against allowing Grape Bay Ltd, which includes ex-Premier Sir John Swan and United Bermuda Party backbencher Maxwell Burgess among its principals, to operate a foreign fast food franchise on the Island.

Mr. Diel pointed out that the letter, written in 1992 to Leon Simmons, now a player in Grape Bay Ltd, gave either party an out after 180 days.

And he said: "If it was a true letter of intent....why would you have an escape clause there? You wouldn't need one.'' Mr. Diel added that the issue of royalties not being agreed -- a basic part of any contract, according to Mr. Mottley -- was not an issue either.

He said that letter said that the deal would be "subject to the normal terms and conditions'' set by McDonald's.

And he added: "It's a simple matter to ascertain what is the customary and usual terms and conditions of McDonald's.

Mr. Diel said: "This `letter of intent' has now been in existence for five years and Grape Bay Ltd has spent considerable sums of money on it.'' And he listed architectural and legal fees, as well as costs associated with training, entertainment and incorporation of Grape Bay.

Mr. Diel claimed: "There is nothing which my learned friend has said, there is no evidence from McDonald's, which says they did not not intend it to be binding. All he can do is take you to the document.'' And he insisted the letter "expressly stated'' both parties had obligations -- the most important of which was that McDonald's would not open any restaurants in Bermuda without Grape Bay as long as the population was below 100,000.

Mr. Diel said: "The benefit being that the only entity which can trade as McDonald's in Bermuda is Grape Bay Ltd. -- that amounts to an exclusive dealership.'' Grape Bay Ltd. is arguing that contracts with people in Bermuda and overseas constitute property -- which is protected under the Constitution.

Another plank of the argument is whether McDonald's can legally be regarded as a restaurant. Mr. Diel also claimed that banning McDonald's is not in the public interest and asked Mr. Justice Meerabux to consider if the Act was in line with Constitutionally-guaranteed freedoms.

But Mr. Mottley said the letter of intent could not be a legally-binding contract, so it could not count as property.

He also claimed that international law respected the rights of "the legislative arm'' -- against which the suit had been brought -- to decide "what is in the public interest when deciding social and economic policy.'' Mr. Mottley quoted evidence from Bermuda groups to a special Cabinet Committee set up to review fast food franchises which was overwhelmingly against them.

The Committee, however, did recommend allowing them but with conditions attached to avoid them becoming a blot on the landscape.

RESTAURANTS EAT