last court of appeal in London.

And a five-strong panel of Law Lords from the Privy Council heard the opening arguments in favour of allowing Grape Bay Ltd. to open a McDonald's fast food franchise in Bermuda.

The Grape Bay team, barristers Mark Diel and Ronnie Myers, presented their case to Privy Council president Lord Hoffman and his fellow judges yesterday.

Mr. Diel said his 193-page set of arguments had concentrated on the main points that Grape Bay contracts and letters of intent exchanged with McDonald's and their agents were property.

They also argued that the firm had been deprived of property rights which are guaranteed under the Constitution and that these are enforceable in isolation -- contrary to the findings of the Court of Appeal, which backed Parliament and banned McDonald's.

And they questioned whether depriving Grape Bay through the Prohibited Restaurants Act, which had the effect of banning fast food franchises, was in the public interest.

Solicitor General William Pearce started his arguments yesterday afternoon and will complete them on Thursday.

The Bermuda Court of Appeal took Big Macs off the menu almost a year ago when they reversed an earlier Supreme Court decision in favour of Grape Bay.

The Act was pushed through in 1996 by rebel United Bermuda Party MP Ann Cartwright DeCouto -- who lost her seat at last November's General Election -- with support from four colleagues and the then-Opposition Progressive Labour Party.

The Senate used its powers to block the law for the maximum of a year, but the rebels and the PLP won another vote in 1997.

Mr. Diel and Mr. Myers won a Supreme Court tussle against then-Attorney-General Elliott Mottley in August, 1997, to overturn the Act.

A Supreme Court judge ruled that the letters of intent were property and protected under the Constitution.

But that view was not backed by the Court of Appeal who said it had not been proved Grape Bay had been deprived of property without compensation -- a key part of the Constitution.