More than a month after its own attorney Deborah Peake advised state-owned Petrotrin to move quickly and file an application in the High Court to set aside the results of an arbitration between itself and A&V Oil and Gas that could cost the state company close to $1 billion, it has not taken the advise and is said to still mulling its position.
Michael Quamina, chairman of Heritage Petroleum, the company that has succeeded Petrotrin, confirmed that no action has been filed against A&V Oil and Gas and insisted that the company’s attorneys are still “looking into the matter.”
He said, “At present it is with all of the lawyers, that is all I can tell you.”
Asked when is a decision to be made he said, “I have no further comment Curtis...You know all of these things are very sensitive, you have lawyers involved, they having their special talks so I can’t say anything more than that.”
Told this was a public interest matter and the country had the right to know what is happening Quamina said, “I don’t know how that conflicts with what I am saying. If I have nothing to say Curtis, I cant say something because there is public interest. I am not being difficult but I am being honest.”
Told that all litigation must come to an end he said, “I am not saying it is going to continue ad-infinitum either, but the fact about it is, as you say this is a matter of significant public interest and the point about it is that it is being dealt with very, very appropriately and comprehensively.”
In a confidential 18-page opinion done for Petrotrin on the outcome of a recent arbitration between itself and A&V, Peake argued that the arbitral panel involved in the matter made fundamental errors in coming to their conclusion and that the state-owned company had a good chance of success if it went to the High Court for relief.
The opinion reads: “In the premises, we are of the respectful view that the award discloses gross and fundamental errors on the face of the award and the arbitrators are guilty of misconduct in the conduct of the proceedings. The findings on the principal issues are irrational and unsupported by the evidence. For the foregoing reasons, we are of the view that the prospects of setting aside the award are good.”
The A&V Oil and Gas issue first came to light when Opposition leader Kamla Persad-Bissessar read on a political platform a report that alleged A&V Oil and Gas, which is owned by Nazim Baksh, a man Prime Minister Dr Keith Rowley describes as his friend, was charging Petrotrin for oil his company did not actually produce.
Petrotrin would subsequently investigate the issue and discontinue its contract with A&V drilling for crude from the Catshill field in Rio Claro.
Peake, who represented Petrotrin in the arbitration, argued that unless moves are made now to stop the arbitration, the company could find itself paying out significant sums.
“Unless the award is set aside, there is a high probability that in any further hearing on the issue of the quantum of damages to which the tribunal has decided that A&V is entitled, the tribunal will award substantial damages, particularly since it has decided (remarkably having regard to the evidence) that all A&V’s witnesses are credible.”
A&V has asked the tribunal that it be awarded US$119,409,000 or the equivalent of $808,398,930. This does not include issues of cost and other money which Petrotrin is said to be holding in escrow for oil under dispute.
However, Peake argued that the arbitral panel, which comprised Sir Dennis Byron, Lord David Hope and CVH Stollmeyer, made several errors during the matter, including placing an erroneous burden of proof on Petrotrin that there were reasonable grounds for suspicion that A&V was misrepresenting the amount of oil produced and sold to the State company and the panel also had the wrong standard of proof.
Petrotrin was advised by its Senior Counsel, “The award states that Petrotrin was required to resolve every “possibility that there might be an innocent explanation” before deciding whether or not to terminate the IPSC. This is a standard of proof that does not apply the words of Article 29.1 of the IPSC, which requires “reasonable grounds for suspecting” misconduct or wrongful activity exist.
“To require that termination may only lawfully take place where there are no possible innocent explanations is akin to the criminal standard of proof beyond reasonable doubt.”
She insisted that the ruling is inconsistent with the 2018 ruling of the Court of Appeal in the A&V Oil and Gas vs Petrotrin case.
Peake pointed to the procedure used by the arbitral panel by allowing A&V drilling to make oral arguments that were, in her view, inconsistent with their pleadings and therefore, the panel, she posited, acted contrary to its own procedural directions.
“The tribunal allowed and substantially relied on A&V’s arguments on the capacity of the field that had nothing to do with, and which were different from its pleaded case.
“This was in breach of the tribunal’s procedural order and in our respectful view, amounts to misconduct of the proceedings,” Peake has advised Petrotrin.
She insisted that the ruling placed Petrotrin and its successor company Heritage at serious financial risk and the possibility of other companies taking advantage of it.
The Senior Counsel wrote, “In light of the fundamental errors made by the tribunal (ii) the gross miscarriage of injustice occasioned by the award; (iii) the message it sends to the employees of Heritage, Petrotrin’s successor company, who gave evidence at the arbitration, others who provided yeoman service in providing technical and other advice to the legal team over many days and weeks and other operators who may seek to engage in questionable practices given the largely manual system of measurement which continues to obtain; and (iv) the substantial sum of money at stake we strongly advise that a claim be filed forthwith (this is by week commencing 21 June) to set aside the award and that an application be made to the High Court to stay the further hearing of the arbitration proceedings pending the hearing of the claim.”
The arbitral panel is yet to make a decision on the final quantum it will award A&V drilling as a result of the termination of its contract by Petrotrin, but Peake noted that on Tuesday, A&V had already made an application for a $75 million part payment of the money that would be owed to it due to the award.
Almost a month ago Quamina had promised that Petrotrin would have decide by the end of June if it was going to go to the High Court to try and set aside the results of the arbitration with A&V Oil and Gas, or pay the company close to $1 billion.
Quamina said at that time; “I have to tell you that I am not directly involved in the matter since I have recused myself, but yes, the Petrotrin board will have to look at it, look at senior’s legal opinion and perhaps other legal opinions and then make a decision. I will not be part of the decision but I know things are in train to meet by the end of next week and we will meet the tight deadlines.”