Derek Achong

Brazil­ian con­struc­tion firm Con­struc­to­ra OAS SA will have to wait to learn the fate of its ap­peal over a judge’s de­ci­sion to set aside its al­most $850 mil­lion ar­bi­tra­tion award in re­la­tion to the Solomon Ho­choy High­way ex­ten­sion project to Point Fortin.

Ap­pel­late Judges Nolan Bereaux, Mark Mo­hammed and Pe­ter Ra­jku­mar re­served their de­ci­sion on the ap­peal af­ter hear­ing ex­ten­sion sub­mis­sions from lawyers for the Brazil­ian com­pa­ny and the Na­tion­al In­fra­struc­ture De­vel­op­ment Com­pa­ny Lim­it­ed (Nid­co) at the Hall of Jus­tice in Port-of-Spain yes­ter­day af­ter­noon. 

In the ap­peal, the com­pa­ny is con­tend­ing that High Court Judge Frank Seep­er­sad was wrong to have set aside the ar­bi­tra­tion award and re­mit the case to the Lon­don Court of In­ter­na­tion­al Ar­bi­tra­tion (LCIA) for its re­con­sid­er­a­tion in mid-De­cem­ber 2022.

Pre­sent­ing sub­mis­sions, OAS’s lawyer Rol­ston Nel­son, SC, claimed that nei­ther Jus­tice Seep­er­sad nor the Court of Ap­peal had the ju­ris­dic­tion to re­view the LCIA’s de­ci­sion.

He point­ed to a clause in the con­tract be­tween Nid­co and OAS, which stat­ed that all le­gal dis­putes would be dealt with through ar­bi­tra­tion be­fore the LCIA.

How­ev­er, Nel­son al­so main­tained that Jus­tice Seep­er­sad’s crit­i­cisms of the ar­bi­tra­tion award were un­found­ed.

“The judge com­plete­ly usurped the func­tions of the ar­bi­tra­tion pan­el,” Nel­son said.

Re­spond­ing to the sub­mis­sions, Nid­co’s lawyer An­neliese Day, KC, claimed that the ouster clause re­ferred to by Nel­son had no le­gal ef­fect based on the pro­vi­sions of ar­bi­tra­tion leg­is­la­tion passed by Par­lia­ment in 1939 and 2023.

She not­ed that both pieces of leg­is­la­tion state that ar­bi­tra­tion agree­ments are ir­rev­o­ca­ble ex­cept by leave of a court.

“It ousts the court’s ju­ris­dic­tion and is con­trary to pub­lic pol­i­cy,” Day said.

She al­so claimed Jus­tice Seep­er­sad could not be fault­ed, as the ar­bi­tra­tion pan­el’s de­ci­sion was in­con­sis­tent with the ev­i­dence pre­sent­ed be­fore them.

“These find­ings are com­plete­ly ir­ra­tional,” Day said, as she not­ed that the pan­el found that OAS did not de­mo­bilise be­fore the con­tract was ter­mi­nat­ed was con­trary to its own ad­mis­sions over moves to re­trench staff at the time.

“The doc­u­ments re­lied on showed the op­po­site,” she said.

She claimed that OAS’ ef­forts to re­new per­for­mance bonds was an at­tempt to avoid the ter­mi­na­tion of the con­tract for aban­don­ment.

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 in 2016, the project was put on hold for sev­er­al years be­fore be­ing restart­ed with lo­cal con­trac­tors.

In Au­gust 2021, 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, 2022, ar­bi­tra­tors John Fel­las, Adam Con­sta­ble, KC, and An­drew White, KC, up­held OAS’ 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$31 mil­lion in­to 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 rep­re­sent­ed 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.

In his judg­ment, Seep­er­sad point­ed to var­i­ous ar­eas of the award where he found the tri­bunal failed to put for­ward a po­si­tion, prop­er­ly eval­u­ate, or make a find­ing on the ev­i­dence and con­tentions put for­ward by Nid­co.

“The tri­bunal had an oblig­a­tion to crit­i­cal­ly re­view all the in­for­ma­tion be­fore it and to ex­plain why the claimant’s ar­gu­ments and ev­i­dence were re­ject­ed. How­ev­er, the award does not re­flect that such a mea­sured eval­u­a­tion of the ev­i­dence was en­gaged,” Seep­er­sad said.

Nid­co was al­so rep­re­sent­ed by Ja­son Mootoo, SC. Gre­go­ry Pan­tin and Miguel Vasquez ap­peared along­side Nel­son for OAS.