Derek Achong

Se­nior Re­porter

derek.achong@guardian.co.tt

The Com­mu­ni­ty-based En­vi­ron­men­tal Pro­tec­tion and En­hance­ment Pro­gramme Com­pa­ny (Cepep) has threat­ened to sue its for­mer chair­man, Joel Ed­wards, over his role in fa­cil­i­tat­ing the three-year re­newals of the con­tracts of over 300 con­trac­tors, days be­fore the April 28 Gen­er­al Elec­tion. 

The State com­pa­ny’s lawyers, led by Se­nior Coun­sel Anand Ram­lo­gan, of Free­dom Law Cham­bers, is­sued the threat in a pre-ac­tion pro­to­col let­ter that was hand-de­liv­ered to the char­tered ac­coun­tant on Fri­day af­ter­noon. 

In the le­gal cor­re­spon­dence ob­tained by Guardian Me­dia, Cepep in­di­cat­ed that it planned to ini­ti­ate a civ­il law­suit against him for breach of fidu­cia­ry du­ty, fraud, fraud­u­lent mis­rep­re­sen­ta­tion, and mis­fea­sance in pub­lic of­fice over al­le­ga­tions that he claimed the then-Cab­i­net had ap­proved the re­newals. 

Cepep sug­gest­ed that through the pro­posed law­suit, it would be seek­ing an or­der against him to in­dem­ni­fy it against any loss­es it may sus­tain in re­la­tion to the con­trac­tors and their sub­se­quent ter­mi­na­tions by the Unit­ed Na­tion­al Con­gress (UNC)-led coali­tion Gov­ern­ment in late June. 

In the event Cepep makes good on its threat and is grant­ed the or­der af­ter suc­cess­ful­ly pur­su­ing the case, it would mean that Ed­wards could be held per­son­al­ly li­able for the sig­nif­i­cant costs as­so­ci­at­ed with sep­a­rate on­go­ing lit­i­ga­tion over the ex­ten­sions and re­cent ter­mi­na­tions. 

The com­pa­ny gave Ed­wards two weeks to pro­vide a sat­is­fac­to­ry re­sponse be­fore pro­ceed­ing with the pro­posed law­suit.

In a brief tele­phone in­ter­view yes­ter­day, Ed­wards con­firmed re­ceipt of the let­ter but de­clined to re­spond pub­licly be­fore his lawyers do so of­fi­cial­ly.

“I would make no com­ment. As I told you, the mat­ter is sub-ju­dice, so I am not mak­ing any com­ments at all,” Ed­wards said.

Dif­fer­ence of opin­ion over Cab­i­net ap­proval re­quire­ment

The is­sue of Cab­i­net ap­proval arose af­ter the Peo­ple’s Na­tion­al Move­ment (PNM) filed a breach of con­tract law­suit on be­half of one of the con­trac­tors, Laven­tille-based gen­er­al con­tract­ing com­pa­ny East­man En­ter­prise Lim­it­ed. 

Re­spond­ing to the law­suit, Cepep put for­ward an af­fi­davit from Cepep’s chief ex­ec­u­tive of­fi­cer (CEO), Kei­th Ed­dy, who claimed that Ed­wards gave as­sur­ances to him and the com­pa­ny’s board that Cab­i­net had en­dorsed the re­newals be­fore they ap­proved such. 

In re­sponse, Ed­wards sub­mit­ted an af­fi­davit on East­man’s be­half, claim­ing he nev­er gave such as­sur­ances and had at­tempt­ed to cor­rect a board note that stat­ed the re­newals were ap­proved by the then-Cab­i­net.

Ed­dy then filed an­oth­er af­fi­davit chal­leng­ing Ed­wards’ claims. 

Ed­dy pro­vid­ed a tran­script of What­sApp mes­sages be­tween him and Ed­dy to but­tress his orig­i­nal claim. 

He fur­ther con­tend­ed that be­fore Ed­wards gave the al­leged as­sur­ance, he (Ed­dy) was pres­sured by for­mer rur­al de­vel­op­ment and lo­cal gov­ern­ment min­is­ter Faris Al-Rawi in­to fa­cil­i­tat­ing the re­newals of the con­tracts, due to ex­pire next year, to 2029.

In the let­ter to Ed­wards, Cepep’s lawyer Jared Ja­groo chal­lenged his (Ed­wards’s) claims of at­tempt­ing to cor­rect the board note. 

Stat­ing that Ed­wards’ al­leged as­sur­ance was clear, of­fi­cial, and au­thor­i­ta­tive, Ja­groo said, “De­spite this al­leged ‘er­ror’, you failed to take any time­ly cor­rec­tive ac­tion. You did not no­ti­fy the Board, re­tract your state­ment, or cause the record to be cor­rect­ed. 

“The re­sult was that Cepep, act­ing un­der a false be­lief, im­ple­ment­ed these ex­ten­sions, ex­pos­ing it to sig­nif­i­cant le­gal, fi­nan­cial, and rep­u­ta­tion­al risks.”

Ja­groo claimed that Ed­wards breached sec­tion 99 of the Com­pa­nies Act, which deals with di­rec­tors breach­ing their fidu­cia­ry du­ties to com­pa­nies on whose boards they serve. 

“You failed to act hon­est­ly and in good faith with a view to the best in­ter­ests of Cepep. You breached your fidu­cia­ry du­ty and re­spon­si­bil­i­ty to Cepep, there­by caus­ing loss and dam­age,” Ja­groo said. 

While Cepep has pro­vid­ed cor­re­spon­dence from se­nior of­fi­cials at both the Min­istry of Fi­nance and the Min­istry of Rur­al De­vel­op­ment and Lo­cal Gov­ern­ment, who claimed that Cab­i­net ap­proval for the re­newals was re­quired to com­mit the State to such sig­nif­i­cant and pro­tract­ed ex­pen­di­ture, the PNM has de­nied their claims. 

Ad­dress­ing a PNM pub­lic meet­ing at the Mal­abar Com­mu­ni­ty Cen­tre on Thurs­day night, for­mer fi­nance min­is­ter Colm Im­bert claimed that in 2015, the then-Cab­i­net, of which he was part, del­e­gat­ed the au­thor­i­ty to ex­tend con­tracts to Cepep’s board. 

“That was nev­er re­scind­ed. That note was nev­er var­ied. Even the same UNC has not re­scind­ed that,” Im­bert said. 

Im­bert al­so ques­tioned how the $60 mil­lion that was ap­proved in June by Par­lia­ment to pay Cepep con­trac­tors un­til the end of the year would now be utilised in light of the ter­mi­na­tions. 

“They came and asked for an ex­tra $60 mil­lion to pay for all those PNM con­tracts. That was in June. And when they fin­ish get the ap­proval, they ter­mi­nate all the con­tracts. And now say­ing the con­tracts had no ap­proval. Jok­ers! Let’s see where they’re go­ing with that. So that’s why I say we will fight them,” Im­bert said. 

About the con­trac­tor’s case

In its sub­stan­tive case, cur­rent­ly be­fore Jus­tice Mar­garet Mo­hammed, East­man is con­tend­ing that Cepep act­ed un­law­ful­ly in ter­mi­nat­ing the con­tracts based on a di­rec­tive from the cur­rent Cab­i­net led by Prime Min­is­ter Kam­la Per­sad-Bisses­sar. 

It claims that Cepep was re­quired to make an im­me­di­ate pay­ment for one month of ser­vice, as it sought to ter­mi­nate the con­tract un­der Clause 15 with­out pro­vid­ing no­tice.

The clause al­lows Cepep to ter­mi­nate by giv­ing 30 days’ no­tice or mak­ing a pay­ment in lieu of no­tice if the com­pa­ny fails to meet its con­trac­tu­al oblig­a­tions or per­for­mance as­sess­ments con­duct­ed by Cepep of­fi­cials. 

It is al­leged that while it was promised that the pay­ment would be processed and dis­pensed when Cepep no­ti­fied the com­pa­ny of the ter­mi­na­tion, the pay­ment should have been made to­geth­er with the ter­mi­na­tion let­ter. 

It is al­so con­tend­ing that the clause is un­fair and in breach of the Un­fair Con­tract Terms Act 1985, as it gave Cepep too wide of a dis­cre­tion to ter­mi­nate. 

The com­pa­ny al­so sought an in­junc­tion stay­ing the mass ter­mi­na­tion of the con­tracts and block­ing Gov­ern­ment from ap­point­ing re­place­ment con­trac­tors whilst its case is re­ceiv­ing ju­di­cial con­sid­er­a­tion. 

Re­spond­ing to the law­suit, Cepep raised the is­sue of the lack of Cab­i­net ap­proval for the ex­ten­sions. 

It al­so filed an ap­pli­ca­tion for the case to be struck out on the ba­sis that the com­pa­ny had an al­ter­na­tive method of chal­leng­ing the ter­mi­na­tion through me­di­a­tion and ar­bi­tra­tion based on a clause of the con­tract. 

Dur­ing a hear­ing of the case last week, Jus­tice Mo­hammed re­quest­ed ad­di­tion­al sub­mis­sions on the strik­ing-out ap­pli­ca­tion, which she would con­sid­er first be­fore mov­ing on to the in­junc­tion ap­pli­ca­tion. 

Jus­tice Mo­hammed is ex­pect­ed to de­liv­er her de­ci­sion on Cepep’s ap­pli­ca­tion on Au­gust 8.