Derek Achong

The Na­tion­al In­fra­struc­ture De­vel­op­ment Com­pa­ny Lim­it­ed (Nid­co) will have to wait un­til De­cem­ber 14 to learn the fate of its law­suit seek­ing to set aside the over $850 mil­lion ar­bi­tra­tion award over the Solomon Ho­choy High­way ex­ten­sion project. 

High Court Judge Frank Seep­er­sad set the date to de­liv­er his judg­ment in the case af­ter hear­ing sub­mis­sions from at­tor­neys rep­re­sent­ing Nid­co and Brazil­ian con­struc­tion firm Con­struc­to­ra OAS SA dur­ing a hy­brid hear­ing in the San Fer­nan­do High Court on Fri­day.. 

Pre­sent­ing sub­mis­sions on be­half of Nid­co, British King’s Coun­sel An­neliese Day claimed that the award is­sued by three ar­bi­tra­tors from the Lon­don Court of In­ter­na­tion­al Ar­bi­tra­tion in April should be set aside as the pan­el made nu­mer­ous er­rors when as­sess­ing the case. 

She point­ed to sev­er­al in­stances in which she claimed the pan­el failed to pro­vide rea­sons why it ig­nored ev­i­dence, which sup­port­ed Nid­co’s con­tentions. 

Re­spond­ing to the sub­mis­sions, OAS’s lawyer Rol­ston Nel­son claimed that Seep­er­sad should not en­ter­tain the case based on a clause in the con­tract be­tween the par­ties, which stat­ed that they would re­solve their dis­putes sole­ly through the ar­bi­tra­tion process. 

“This is a con­sen­su­al process where the par­ties choose their judges. The court mere­ly su­per­vis­es to en­sure that there is no bias,” he said, as he not­ed that the pan­el se­lect­ed by the par­ties was very ex­pe­ri­enced. 

He al­so point­ed out that the clause was in­clud­ed in the con­tract by mu­tu­al con­sent and was in­tend­ed to en­sure that there was a mech­a­nism to quick­ly re­solve dis­putes be­tween the par­ties to avoid lengthy and cost­ly lit­i­ga­tion be­fore the lo­cal courts. 

“One has to give def­er­ence to what the tri­bunal found,” he said. 

Day sug­gest­ed that the clause should not be strict­ly ap­plied based on the pub­lic in­ter­est in the case as tax­pay­ers would have to pay the com­pen­sa­tion or­dered for OAS. 

“We are not seek­ing to ap­peal. We want the award set aside and re­mit­ted to the tri­bunal,” she said. 

“Even the most em­i­nent prac­ti­tion­ers can make er­rors and this is ex­act­ly what hap­pened,” Day said. 

She al­so stat­ed that the ar­bi­tra­tion pan­el did not cor­rect­ly de­cide that it was en­ti­tled to ter­mi­nate the con­tract as OAS was un­der ju­di­cial re­struc­tur­ing due to in­sol­ven­cy. 

“It was a bizarre and un­sup­port­ed find­ing that OAS had not aban­doned the works when it had,” Day said. 

Nel­son re­spond­ed by stat­ing that the com­pa­ny’s pre­car­i­ous fi­nan­cial sit­u­a­tion was par­tial­ly due to Nid­co’s fail­ure to make in­ter­im pay­ments as re­quired. He al­so sug­gest­ed that his client on­ly be­gan to de­mo­bilise work on the project af­ter it be­gan talks with Nid­co over the am­i­ca­ble ter­mi­na­tion of the con­tract. 

In ear­ly 2011, OAS was award­ed the con­tract for the project, which was then es­ti­mat­ed to cost ap­prox­i­mate­ly $5.3 bil­lion. 

Af­ter the con­tract was ter­mi­nat­ed, the project was put on hold for sev­er­al years be­fore be­ing restart­ed with lo­cal con­trac­tors. 

In Au­gust, last year, Nid­co an­nounced that the project was three-quar­ters com­plete.

How­ev­er, sev­er­al months lat­er a seg­ment of the high­way at Mos­qui­to Creek col­lapsed.

De­liv­er­ing a de­ci­sion on a par­tial fi­nal award on April 16, ar­bi­tra­tors John Fel­las, Adam Con­sta­ble, KC, and An­drew White, KC, up­held OAS’s ar­bi­tra­tion claim against Nid­co and or­dered US$126.3 mil­lion in com­pen­sa­tion. 

In the 223-page rul­ing, the ar­bi­tra­tion pan­el ruled that Nid­co was wrong to have ter­mi­nat­ed the con­tract based on the two main grounds it claimed. 

In the ar­bi­tra­tion pro­ceed­ings, Nid­co claimed that Con­struc­to­ra OAS ef­fec­tive­ly aban­doned the project in late 2015 af­ter it slowed down work, dis­missed most of its staff and be­came in­sol­vent by let­ting debt ac­cu­mu­late to sup­pli­ers and con­tracts.

The com­pa­ny de­nied any wrong­do­ing as it claimed that the is­sues raised by Nid­co were due to the fact that it (Nid­co) failed to make a ma­jor in­ter­im pay­ment un­der the con­tract. 

It claimed that at the time of the ter­mi­na­tion, it had in­ject­ed a fur­ther US$31mil­lion in the project and had re­newed its per­for­mance and re­ten­tion bonds.  

In up­hold­ing OAS’ case, the ar­bi­tra­tion tri­bunal or­dered that it be paid US$127,072,326 in dam­ages mi­nus the US$706,426.70 off­set grant­ed to Nid­co. 

The dam­ages rep­re­sent the com­pa­ny’s claims for per­for­mance and re­ten­tion se­cu­ri­ties, a se­ries of un­paid in­ter­im pay­ment cer­tifi­cates (IPCs), ma­te­ri­als in stock, tem­po­rary works, and con­tract­ing equip­ment. 

The com­pen­sa­tion to be paid to the com­pa­ny can still rise as the ar­bi­tra­tion pan­el re­quest­ed fur­ther sub­mis­sions from the par­ties on whether the dam­ages award­ed could at­tract in­ter­est. 

The tri­bunal al­so has to con­sid­er the com­pa­ny’s claim for ad­di­tion­al dam­ages on the ground that Nid­co was over­paid when it seized the bonds in con­nec­tion with the ad­vance pay­ment de­duc­tions. 

In Ju­ly 2019, Cab­i­net an­nounced a Com­mis­sion of En­quiry to in­ves­ti­gate as­pects of the project in­clud­ing whether a min­is­te­r­i­al over­sight com­mit­tee un­der the for­mer Peo­ple’s Part­ner­ship gov­ern­ment had ful­filled its man­date. 

The com­mit­tee was head­ed by for­mer prime min­is­ter and cur­rent Op­po­si­tion Leader Kam­la Per­sad-Bisses­sar and in­clud­ed sev­er­al for­mer mem­bers of her Cab­i­net. 

The com­mis­sion, which is yet to com­mence its work, is to be chaired by re­tired judge Se­bas­t­ian Ven­tour, with at­tor­ney Gre­go­ry Delzin serv­ing as com­mis­sion­er. 

Nid­co was al­so rep­re­sent­ed by Ja­son Mootoo.