The corporation had filed a pre-action protocol letter calling on the members of the commission to recuse themselves from the hearings, claiming that the members had shown bias against UDeCOTT and its executive chairman, Canadian-born Calder Hart.
The letter stated that if they had not resigned legal action would follow to have the hearings suspended until they stand down.
The lawsuit had the potential to stop the probe, which is due to resume hearings in September.
It is not clear why UDeCOTT reversed its decision. But local media reports suggest that there was a third party intervention, probably from the office of Attorney General John Jeremie.
The reports say Jeremie did not support the UDeCOTT's plan to file the lawsuit because it would have amounted to a state company challenging a cabinet decision.
Lawyers for UDeCOTT, Pollonais, Blanc, de la Bastide and Jacelon, wrote the secretary of the Commission of Enquiry, Judith Gonzalez, saying UDeCOTT is withdrawing the legal action. However they said one condition of the decision is that UDeCOTT retains its right to pursue matters of bias in the future.
Another condition is that UDeCOTT will withdraw its letters of July 28 and July 31 on the issue of bias.
UDeCOTT's pre-action letter cited remarks allegedly made by Commissioner Israel Khan suggesting that he had a problem with people of white European ancestry, which it claimed was a direct attack on Hart, who is a white Canadian.
The letter also cited the treatment given by the Commission to the evidence of Carl Khan, the former husband of Hart's wife who testified that there was a relationship between the Harts and CH Development, a firm that won a contract to build the Legal Affairs tower.
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