Cur­tis Williams

cur­tis.williams@guardian.co.tt

State-owned Petrotrin is be­ing urged by its Se­nior Coun­sel Deb­o­rah Peake, to move quick­ly and file an ap­pli­ca­tion in the High Court to set aside the re­sults of an ar­bi­tra­tion be­tween A&V Oil and Gas and Petrotrin that could cost the state com­pa­ny close to $1 bil­lion.

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, which was de­liv­ered to Petrotrin yes­ter­day and which Guardian Me­dia has a copy of, 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 TT$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.