JavaScript is disabled in your web browser or browser is too old to support JavaScript. Today almost all web pages contain JavaScript, a scripting programming language that runs on visitor's web browser. It makes web pages functional for specific purposes and if disabled for some reason, the content or the functionality of the web page can be limited or unavailable.

Sunday, February 23, 2025

Privy Council rules EMBD must pay Junior Sammy $83M

by

116 days ago
20241030

The Es­tate Man­age­ment and Busi­ness De­vel­op­ment Com­pa­ny Lim­it­ed (EM­BD) will have to pay over $83 mil­lion in out­stand­ing fees to Ju­nior Sam­my Con­trac­tors Lim­it­ed.

De­liv­er­ing a judg­ment yes­ter­day morn­ing, five Law Lords of the Unit­ed King­dom-based Privy Coun­cil dis­missed EM­BD’s fi­nal ap­peal against Ju­nior Sam­my Con­trac­tors over the debt.

Lord Ben Stephens, who wrote the judg­ment, ruled that for­mer High Court Judge and cur­rent Ap­peal Court Judge Mi­ra Dean-Ar­mor­er and the Court of Ap­peal could not be fault­ed for grant­i­ng Ju­nior Sam­my a de­fault judg­ment and or­der­ing the com­pen­sa­tion.

Ac­cord­ing to the ev­i­dence in the case, the le­gal dis­pute con­cerns a con­tract for the Ca­roni Sa­van­nah Res­i­den­tial De­vel­op­ment un­der­tak­en by EM­BD, which man­ages lands for­mer­ly held by Ca­roni (1975) Lim­it­ed.

EM­BD award­ed the con­tract to an­oth­er com­pa­ny in 2010 but it (the con­tract) was even­tu­al­ly ter­mi­nat­ed, as the com­pa­ny failed to per­form or com­plete the work.

Ju­nior Sam­my Con­trac­tors sub­mit­ted a $231 mil­lion ten­der for the project and was award­ed the con­tract to com­plete the de­vel­op­ment.

It sued EM­BD af­ter it on­ly paid sev­en of the 13 in­ter­im pay­ment cer­tifi­cates (IPCs), which were ap­proved by the in­de­pen­dent en­gi­neer­ing com­pa­ny ap­point­ed by EM­BD to act as its agent.

In its de­fence, EM­BD re­quest­ed the dis­clo­sure of sup­port­ing doc­u­men­ta­tion, as it al­leged that there was fraud in the cer­ti­fi­ca­tion of the work.

EM­BD al­so claimed that Ju­nior Sam­my could not pur­sue le­gal ac­tion, as it had as­signed the out­stand­ing pay­ments, which are the sub­ject of the law­suit, to Ansa Mer­chant Bank when it bor­rowed $40 mil­lion to off­set the de­lay in pay­ments.

In re­solv­ing the ap­peal, Lord Stephens and his col­leagues agreed with the lo­cal courts that the debt was not ab­solute­ly as­signed to the bank, al­though it ap­peared so in the doc­u­ments re­lat­ed to the fi­nanc­ing arrange­ment.

“Thus far, there is a pow­er­ful case, on the true con­struc­tion of the doc­u­ments, that the Con­trac­tor and the Mer­chant Bank in­tend­ed to pass all the rights of the Con­trac­tor in the debt to the Mer­chant Bank,” Lord Stephens said.

“How­ev­er, a de­tailed analy­sis of the doc­u­ments re­veals that in re­al­i­ty, the trans­ac­tion was a loan with an eq­ui­table as­sign­ment of the debt in or­der to se­cure re­pay­ment of the loan,” he added.

He point­ed out the con­trac­tor was left with the sole dis­cre­tion to com­mence pro­ceed­ings to re­coup the debt.

“The Con­trac­tor does not have to ob­tain the Mer­chant Bank’s per­mis­sion to com­mence pro­ceed­ings,” he said.

Deal­ing with EM­BD’s re­quest for ad­di­tion­al in­for­ma­tion, the board ruled that its claims of fraud were fan­ci­ful and spec­u­la­tive.

“None of the rea­sons was sup­port­ed by an ex­pert wit­ness. The board con­cludes that there is no sub­stance in any of them,” Lord Stephens said.

“The ap­pli­ca­tion for spe­cif­ic dis­clo­sure is a fish­ing ex­pe­di­tion which amounts to no more than a hope that some­thing might turn up,” he added.

In a me­dia con­fer­ence to an­nounce the out­come, Ju­nior Sam­my’s lawyer, Ramesh Lawrence Ma­haraj, SC, said he was pleased, as it (the case) set an im­por­tant le­gal prece­dent.

“This judg­ment is im­por­tant not on­ly be­cause it vin­di­cates the rep­u­ta­tion of my client. It is im­por­tant be­cause Gov­ern­ment and State-owned com­pa­nies use this kind of con­tract to, in ef­fect, get con­trac­tors to do con­struc­tion and in­fra­struc­ture,” Ma­haraj said.

He not­ed that the Gov­ern­ment and State com­pa­nies could save sig­nif­i­cant le­gal costs if they fol­low the guid­ance pro­vid­ed.

“I am sure you would agree with me that those ex­pens­es could be saved to ben­e­fit the peo­ple of T&T,” Ma­haraj said.

Ma­haraj re­vealed that his client would be fund­ing a con­fer­ence next year, in which he and a team of British lawyers who worked on the case will lec­ture on stan­dard form con­tracts and the unique type of con­tract that was the sub­ject of the case.

The con­fer­ence is ex­pect­ed to be held in De­cem­ber or Jan­u­ary with con­trac­tors, and gov­ern­ment and State com­pa­ny of­fi­cials will be in­vit­ed to at­tend.

“The pur­pose of that con­fer­ence would be for con­trac­tors and em­ploy­ers to know their rights un­der the con­tracts they op­er­ate un­der, for con­trac­tors to en­force their rights and for gov­ern­ment and State-owned com­pa­nies to know their oblig­a­tions,” Ma­haraj said.

Oropouche East MP Dr Roodal Mooni­lal al­so weighed in on the case in a me­dia re­lease yes­ter­day evening.

Mooni­lal, who is fac­ing a mul­ti­mil­lion civ­il law­suit brought against him, sev­er­al oth­er con­trac­tors, and for­mer EM­BD of­fi­cials over al­leged bid rig­ging in an­oth­er project, crit­i­cised EM­BD for chal­leng­ing Ju­nior Sam­my’s case.

“The tax­pay­er paid mil­lions of dol­lars for this rum shop ar­gu­ment de­void of ev­i­dence,” he said. (See oth­er sto­ry)

Ear­li­er this month, the Privy Coun­cil re­fused some of the con­trac­tors in Mooni­lal’s case per­mis­sion to ap­peal the dis­missal of their pre­lim­i­nary and pro­ce­dur­al chal­lenge to it. It ruled that the ap­peal did not raise an ar­guable point of law or a point of gen­er­al pub­lic im­por­tance.

That case will now go on tri­al be­fore Jus­tice Frank Seep­er­sad.

In yes­ter­day’s mat­ter, EM­BD was rep­re­sent­ed by Jonathan Ac­ton Davis, KC, Col­in Kan­ga­loo, SC, and Jen­nifer Jones, KC.

David Thomas, KC, and Robert Strang ap­peared along­side Ma­haraj for Ju­nior Sam­my.


Related articles

Sponsored

Weather

PORT OF SPAIN WEATHER

Sponsored