Derek Achong

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.