Derek Achong

Brazil­ian con­struc­tion com­pa­ny Con­struc­to­ra OAS SA has ap­pealed the de­ci­sion of High Court Judge Frank Seep­er­sad to set aside the $850 mil­lion ar­bi­tra­tion award it re­ceived over the Solomon Ho­choy High­way ex­ten­sion project.

Guardian Me­dia un­der­stands that on Wednes­day, the com­pa­ny’s lawyers filed the no­tice of ap­peal over Seep­er­sad’s de­ci­sion from mid-De­cem­ber, last year.

In the court fil­ings, ob­tained by Guardian Me­dia, the com­pa­ny raised 13 grounds of ap­peal, in which it claims that Seep­er­sad mis­han­dled the case brought by the Na­tion­al In­fra­struc­ture De­vel­op­ment Com­pa­ny Ltd (Nid­co).

“The learned judge failed to ap­ply, prop­er­ly or at all, the gen­er­al prin­ci­ples to set­ting aside an ar­bi­tral award, in par­tic­u­lar, that an ar­bi­tral award can on­ly be set aside in lim­it­ed cir­cum­stances where there is mis­con­duct or the ward was im­prop­er­ly pro­cured, that courts strive to up­hold ar­bi­tral awards and do not clin­i­cal­ly dis­sect them, that a court can­not con­duct a re­view of the mer­its of the dis­pute sub­mit­ted to ar­bi­tra­tion and that courts ap­ply the prin­ci­ples of fi­nal­i­ty, par­ty au­ton­o­my, and min­i­mal cru­cial in­ter­fer­ence to ar­bi­tral awards,” its lawyers said, in one of their grounds.

In his judg­ment in the case, Seep­er­sad re­mit­ted the case to the Lon­don Court of In­ter­na­tion­al Ar­bi­tra­tion for its re­con­sid­er­a­tion.

Seep­er­sad found that on the face of the award, the tri­bunal fell in­to er­ror and/or dis­re­gard­ed, or mis­con­strued the law and failed to prop­er­ly eval­u­ate the ev­i­dence.

He said: “Hav­ing re­viewed the ev­i­dence which is be­fore the tri­bunal, this court is res­olute in its view that no rea­son­able ar­bi­tra­tor cog­nisant of the law and seized of the ev­i­dence ad­duced could have ar­rived at the po­si­tion re­flect­ed in the award.”

“In the cir­cum­stances, this court, with­out fear or hes­i­ta­tion, must ex­er­cise its in­her­ent ju­ris­dic­tion and dis­charge its oblig­a­tion to de­fend the rule of law and to pro­tect the pub­lic in­ter­est. Con­se­quent­ly, the com­mer­cial de­ci­sion re­flect­ed in the con­tract to have dis­putes de­ter­mined by the ar­bi­tra­tor has to be over­rid­den and the court must set aside the award, as same was premised up­on find­ings that were un­sup­port­able on the ev­i­dence, in­con­sis­tent with the law, and are de­ci­sions which no rea­son­able ar­bi­tra­tor could have ar­rived at,” he added.

In ear­ly 2011, OAS was award­ed the con­tract for the project, which was then es­ti­mat­ed to cost ap­prox­i­mate­ly $5.3 bil­lion.

Af­ter the con­tract was ter­mi­nat­ed in 2016, the project was put on hold for sev­er­al years be­fore be­ing restart­ed with lo­cal con­trac­tors.

In Au­gust 2021, Nid­co an­nounced that the project was three-quar­ters com­plete.

How­ev­er, sev­er­al months lat­er a seg­ment of the high­way at Mos­qui­to Creek col­lapsed.

De­liv­er­ing a de­ci­sion on a par­tial fi­nal award on April 16, last year, ar­bi­tra­tors John Fel­las, Adam Con­sta­ble, KC, and An­drew White, KC, up­held OAS’ ar­bi­tra­tion claim against Nid­co and or­dered US$126.3 mil­lion in com­pen­sa­tion.

In the 223-page rul­ing, the ar­bi­tra­tion pan­el ruled that Nid­co was wrong to have ter­mi­nat­ed the con­tract based on the two main grounds it claimed.

In the ar­bi­tra­tion pro­ceed­ings, Nid­co claimed that Con­struc­to­ra OAS ef­fec­tive­ly aban­doned the project in late 2015 af­ter it slowed down work, dis­missed most of its staff, and be­came in­sol­vent by let­ting debt ac­cu­mu­late to sup­pli­ers and con­tracts.

The com­pa­ny de­nied any wrong­do­ing as it claimed that the is­sues raised by Nid­co were due to the fact that it (Nid­co) failed to make a ma­jor in­ter­im pay­ment un­der the con­tract.

It claimed that at the time of the ter­mi­na­tion, it had in­ject­ed a fur­ther US$31 mil­lion in the project and had re­newed its per­for­mance and re­ten­tion bonds.

In up­hold­ing OAS’ case, the ar­bi­tra­tion tri­bunal or­dered that it be paid US$127,072,326 in dam­ages mi­nus the US$706,426.70 off­set grant­ed to Nid­co.

The dam­ages rep­re­sent the com­pa­ny’s claims for per­for­mance and re­ten­tion se­cu­ri­ties, a se­ries of un­paid in­ter­im pay­ment cer­tifi­cates (IPCs), ma­te­ri­als in stock, tem­po­rary works, and con­tract­ing equip­ment.

In the case be­fore Seep­er­sad, Nid­co’s lawyer British King’s Coun­sel An­neliese Day sub­mit­ted that the ar­bi­tra­tors made er­rors when as­sess­ing the case and failed to pro­vide rea­sons why it ig­nored ev­i­dence that sup­port­ed Nid­co’s con­tentions.

The com­pa­ny’s at­tor­ney Rol­ston Nel­son, SC, claimed that the case should not be en­ter­tained based on a clause in the con­tract be­tween the par­ties, which stat­ed that they would re­solve their dis­putes sole­ly through the ar­bi­tra­tion process.

In his judg­ment, Seep­er­sad point­ed to var­i­ous ar­eas of the award where he found the tri­bunal failed to put for­ward a po­si­tion, prop­er­ly eval­u­ate, or make a find­ing on the ev­i­dence and con­tentions put for­ward by Nid­co.

“The tri­bunal had an oblig­a­tion to crit­i­cal­ly re­view all the in­for­ma­tion be­fore it and to ex­plain why the claimant’s ar­gu­ments and ev­i­dence were re­ject­ed. How­ev­er, the award does not re­flect that such a mea­sured eval­u­a­tion of the ev­i­dence was en­gaged,” Seep­er­sad said.