Senior Reporter
derek.achong@guardian.co.tt
Contractor Super Industrial Services (SIS) has been granted permission to pursue a final appeal before the Judicial Committee of the Privy Council over a long-running dispute with the National Gas Company (NGC) involving the controversial Beetham Water Treatment Plant.
On Wednesday, Appellate Court judges Gillian Lucky, Maria Wilson and Ricky Rahim granted SIS and its subsidiary Rain Forest Resorts Ltd leave to take the matter to the UK-based court, challenging successive rulings by the local courts in favour of NGC.
NGC initiated legal action in December 2015 after commencing arbitration proceedings against the companies over the still-incomplete project. The treatment plant was originally estimated to cost US$162,055,318.77, but NGC is now seeking to recover just over $400 million it says was advanced to SIS before the contract was terminated in 2016.
The State-owned company had earlier obtained a freezing injunction restraining about $180 million in assets belonging to SIS and its subsidiary pending the outcome of the litigation.
However, months before the contract was ultimately terminated, SIS had taken five loans from its subsidiary totalling $330 million, which it claimed were used to help finance the project. SIS later executed four mortgages and a debenture assigning its assets as security for those loans.
NGC has argued that no actual transfer of funds occurred between SIS and Rain Forest Resorts despite the instruments being registered. While it has acknowledged that the transactions did not appear fraudulent on their face, it maintained that the arrangements were designed to frustrate its ability to recover any eventual award, since any alleged intra-group debt would take priority.
NGC, therefore, sought to have the mortgages and debenture set aside, a position upheld by High Court Judge Joan Charles.
In December last year, a differently constituted Court of Appeal panel affirmed that decision. In a ruling delivered by Justice Mira Dean-Armorer, the court found the transactions were properly characterised as intended to defraud NGC, citing the absence of any transfer of funds and the timing of the security instruments despite SIS’s alleged abandonment of the project.
The court also held that SIS and Rain Forest Resorts had failed to disprove an intention to defraud. Justice Dean-Armorer further found that NGC had suffered prejudice, noting that the transactions effectively placed SIS’s assets beyond reach, leaving any eventual judgment potentially unenforceable.
“It is clear that the transaction placed SIS property beyond the reach of NGC. In those circumstances, any litigation against SIS would be in vain,” she said.
The Court of Appeal also upheld the finding that the transactions amounted to a sham, stating it could find no basis to overturn the trial judge’s conclusions.
In determining the appeal, the judges also considered whether NGC had standing to pursue relief typically available to creditors. They ruled that NGC qualified as a creditor at the time the instruments were executed, even though its claim had not yet been reduced to judgment, given the likelihood that the arbitration would crystallise into a debt.
Despite its earlier victories, NGC had initially been blocked from advancing the case after SIS and Rain Forest Resorts successfully argued that procedural deadlines for a case management conference had not been met following the freezing order. A Court of Appeal majority had originally overturned Justice Charles’ decision allowing the matter to proceed.
That procedural ruling was subsequently upheld by the Privy Council, though NGC was later permitted to continue its claim while a related relief from sanctions application remained pending.
NGC is represented by Senior Counsel Deborah Peake, Jason Mootoo and Savitri Sookraj-Beharry. Rain Forest Resorts is represented by Senior Counsel Ramesh Lawrence Maharaj, Leon Kalicharan and Nyala Badal, while SIS is represented by Kiel Taklalsingh and Stefan Ramkissoon.
