Sir John Swan's Grape Bay Ltd yesterday won the right to open a McDonald's burger restaurant in Bermuda.

But Attorney General Elliott Mottley asked for a stay on Puisne Judge Vincent Meerabux's decision minutes after it was announced -- a strong pointer towards a further action in the Court of Appeal.

Mr. Mottley confirmed last night: "We are studying the judgement and we are going to appeal the judgement.'' And that is likely to mean a slot in the sitting of the Court of Appeal in March next year.

Mr. Justice Meerabux's Supreme Court decision ruled that Grape Bay Ltd had contracts with McDonald's and others and that these contracts were property under the Constitution -- which guarantees property rights.

Last night former Premier Sir John Swan declined to comment on the ruling.

United Bermuda Party backbencher Maxwell Burgess, another director of Grape Bay, was off the Island and could not be contacted.

But after Mr. Meerabux handed down the decision, Grape Bay's lawyer Mark Diel said: "We are very pleased.'' He added: "It's certainly been indicated that the Attorney General will appeal.

"We will have to wait and see what the grounds of the appeal are before we make any comment.'' The decision overturned the controversial Prohibited Restaurants Act 1997, signed into law in August after a stormy passage through Parliament.

Grape Bay Ltd wanted to open a McDonald's at the airport, for which it was granted a Government lease, and also had an option on a site at the junction of Parliament and Victoria Streets in Hamilton.

Mr. Justice Meerabux ruled in a 40-page judgement lasting more than an hour that affidavits submitted by Grape Bay Ltd were evidence of contractual arrangements with McDonald's through Warner Holdings Ltd dating back to 1992.

That threw out Mr. Mottley's claims that a letter of intent from McDonald's and Sir John's $3 million underwriting of the project were not contracts or property. And Mr. Justice Meerabux added that the Act represented "constructive deprivation'' of Grape Bay's property -- the contracts -- under the Bermuda Constitution.

Mr. Justice Meerabux said: "I think that it is simply a matter of obeying the Constitution and no-one, not even the Legislature, can disobey the Constitution with impunity.

He added: "At the outset it must be stated that it is not in dispute that there was no compulsory taking of possession or acquisition of the applicant's property....also it is not in dispute that the act does not provide for compensation.'' But he added: "In examining the letter of intent it is clear that the language in it does not negate contractual intention. The uncontroverted evidence is that the parties have acted on the document for approximately five years.'' Mr. Meerabux also said that the Act -- which laid down criminal sanctions for anyone who operated a prohibited restaurant -- was not in the public interest, a qualification of the rights contained in the Constitution.

He added: "By virtue of the prohibition backed by criminal sanctions, I think there are no benefits which accrue to the applicant as well as to other persons in the restaurant industry and the community as a whole.

"In financial terms of the operation of prohibited restaurants, I think that the principal beneficiaries would be the applicant as well as other persons in the restaurant industry and in prohibiting such operations they would not be beneficiaries.

"I remind myself that a fair balance has to be struck between the interests of the community and the rights of the applicant whose property interests are adversely affected.'' Swan scores triumph in burger battle Mr. Justice Meerabux accepted the view of the Cabinet Committee, which heard evidence for and against fast food franchises, that the community was "in the main not overly concerned'' about general franchises and that most of the complaints against fast food franchises centred around appearance and their non-Bermudian nature.

But he added: "I find that there is nothing to balance against the applicant's significant and substantial deprivation.'' UBP MP Ann Cartwright DeCouto, who drew up the Act and led a rebel group of Government MPs into an alliance with the Opposition Progressive Labour Party to push it through the House of Assembly, is off the Island.

But Trevor Moniz, one of the UBP rebel five said the decision was "groundbreaking.'' He added: "I don't agree with the decision -- I'm a member of the legislature and I voted for the Act because I thought it was in the public interest.'' And he said: "I have never known in Bermuda's jurisprudential history before that a judge has declared an Act of Parliament to be void on this basis.

"It's a very far-reaching judgement because it finds almost anything can be property.'' Mr. Moniz said that Mr Meerabux had put far too much emphasis on the Cabinet Committee report which recommended the granting of fast food franchises.

He added: "It was not objective in my opinion because the people on it were people who had already approved the decision.

"Any Cabinet member was tainted by that decision to allow a McDonald's -- they were obviously trying to justify a decision they had already made.

"The foundations of the report were against the weight of evidence which was presented to it. The great weight of the evidence was `no, we don't want McDonald's -- there was huge public concern about it.'' And Mr. Moniz said: "The indication I had was that there would be an appeal if it was lost and I look forward to that.'' The decision is the latest chapter in an anti-McDonald's battle dating back to February last year, when Minister of Finance Grant Gibbons gave permission for Grape Bay to incorporate.

In April last year, Mrs. Cartwright DeCouto tabled a private member's bill aimed at outlawing restaurants with a foreign flavour from the Island, but allowing those up and running before May 10 1996 to continue.

The bill passed the House of Assembly in June -- but was defeated in the Senate, stalling it for a year.

But Mrs. Cartwright DeCouto reintroduced it and it passed its third reading in June. Senate -- which can only delay legislation for a year -- again knocked it back, but it was then forwarded to the Governor who gave it the Royal Assent on August 4.

BURGER BATTLE -- UBP MP Trevor Moniz leaves the Supreme Court.