Judge: ‘Back-door agreement’ of conspiracy between EMBD, contractor

The content originally appeared on: Trinidad and Tobago Newsday

Justice Ricky Rahim. –

La Brea-based mega contractor Namalco will receive considerably less than the $1.3 billion it was claiming from the Estate Management Business Development Company (EMBD) for contracts to develop plots for ex-Caroni (1975) Ltd workers.

Namalco’s demand for payment was for six projects, but only four were dealt with by Justice Ricky Rahim in his 245 page-decision decision on Tuesday – Cedar Hill, Roopsingh Road, Petit Morne, and Picton Monkey Town.

In his ruling, the judge ordered the payment of damages to Namalco for breach of contract but voided several supplementary agreements between the state company and Namalco to the tune of millions because of “acts of unlawful means conspiracy.”

Namalco stands to receive over $427.5 million for three of the contracts, while the fourth is to be assessed based on work done.

In invalidating the supplementary agreements, Rahim found inferences of a “back-door agreement” between the ex-EMBD chief executive officer Seebalack Singh and Namalco to pay higher prices.

At the trial, EMBD accepted it could offer no direct evidence of a conspiracy, but the court held it could be inferred that a combination of actions “were committed with only one intention. Put simply, to extract more money from the state entity EMBD than Namalco would have been entitled to.

Rahim added, “This issue has been scrutinised by this court and has caused much disquiet as there appears, on the evidence, to be a lurking suspicion of agreement.”

It was also found that the tendering rules were contravened and the tendering process was not adhered to in relation to the supplementary agreements.

The case before Rahim began in 2019 and over 450,000 pages of evidence were presented to the court in what was considered one of the largest civil trials.

Namalco claimed the contracts provided for it to carry out and complete works to the design specification of EMBD and/or its engineer.

Those works were to be evaluated by the engineer, with payment being made from time to time upon the issue of certificates called interim payment certificates (IPCs).

Namalco claims that under the FIDIC conditions, EMBD was obligated to pay the amount certified in each IPC within a specified number of days after receipt of certain stipulated documentation.

Namalco also claimed the EMBD breached its own policies on the handling of the contracts.

In turn, EMBD brought claims against four ancillary defendants seeking indemnity or contribution should the court find it liable to Namalco. Those defendants were Andrew Walker, Atlantic Project Consultants Ltd, BBFL Civil Ltd, and Lee Young and Partners.

In its defence and counterclaim, EMBD contended that the sums certified in relation to the contracts were not binding; invoices were inflated, and fees were reduced to take into account deficiencies in the quality of the work.

On the counterclaim, Rahim held while there were some breaches of duty by one of the engineers, since EMBD suffered no loss, its claim for indemnity was dismissed.

The ancillary claim against Walker was stayed to be heard with the other matters, while EMBD was ordered to pay Atlantic $1.6 million left outstanding for one of the projects while the sum for services given and not paid for the other three projects is to be quantified by a High Court master.

The EMBD’s counterclaim against BBFL was also stayed to allow the EMBD to file submissions based on the court’s findings of conspiracy. The claim against Lee Young and Partners was dismissed.

Rahim admitted the case was complex.

“To say that this case has been somewhat of a challenge would be to underestimate the sheer volume of issues and sub-issues which have been raised. Contrary to the assertion of the attorneys for the claimant that it was really a simple matter, its complexity has literally consumed a disproportionate amount of the court’s time and resources despite the efforts of the court to minimise that occurrence.”

Rahim also made it clear that “politics” had no part to play in his ruling.

“The court wishes to add that rarely does a court mention the word ‘politics’ in a judgment and for very good reasons, the most important of which is the preservation of the independence of the Judiciary.

“However, it will not escape the reader that these claims and those similar to them have been the subject of much speculation on all sides of the political fence if one is to accept that which is printed in the newspaper.

“The courts have never been and ought never to be involved in the business of politics, so that the findings made herein are devoid of any such consideration for the absolute avoidance of doubt.

“It is necessary to remind our people of this steadfast principle from time to time in order to maintain the confidence reposed in the courts throughout our twin-island Republic.”

Namalco was represented by Alvin Fitzpatrick,SC, Shiv Sharma, Roger Kawalsingh and J Mohammed while the EMBD was represented by Jonathan Davis, QC, and George Hayman, SC, Colin Kangaloo and Danielle Nieves-Inglefield.

Also before the courts is a lawsuit filed by EMBD against several contractors and other high ranking officials who are alleged to have come together as part of a cartel arrangement whereby they would come together and decide which one of them will win which of the ten contracts at over-inflated prices.

In that claim, it is alleged the contractors were paid millions to carry out infrastructural works at Caroni lands. Three of them sued the EMBD for amounts alleged to be outstanding under those contracts.