Attorneys representing former eTeck chairman Ken Julien and five directors have urged presiding judges at the Privy Council to allow their appeal and put an end to the almost decade-old case.
They faulted the local court’s ruling that enables directors of state companies to be held accountable for not abiding by their duties, regardless of when they held office. Legal action was initiated against Julien and directors Dr Rene Monteil, Brian Copeland, Ulric Mc Nicols, Eugene Tiah and Sonia Noel in a bid to recover US$5 million arising out of an investment in a China-based company, Bamboo Networks Ltd (BNL), in 2005.
The project was to develop eTeck’s information technology business venture, as part of the previous PNM regime’s diversification of the country’s downstream industries. The High Court and the Appeal Court rulings paved the way for the special-purpose company’s lawsuit against the former directors to proceed to trial.
In his ruling, Justice Devindra Rampersad held that the four-year limitation provisions set out by the Companies Act, which are intended to liberate a litigant from the oppression of defending a stale and dated claim, were not a bar to bring legal action if it could be shown the alleged wrongdoer was in control of a company at the material time.
The six had also unsuccessfully challenged Rampersad’s refusal to strike out eTeck’s claim. They then took their fight to the London-based court. It was argued yesterday before Lords Kerr, Reed, Hughes, Lloyd-Jones and Briggs in London. The Law Lords reserved their ruling, admitting it would take time to consider a judgment.
The issue they had to determine concerned whether the former directors could rely on section 14(2) of the Limitation of Certain Actions Act Chap 7:09, which postpones the limitation period where there has been a concealment of facts or a concealment of a breach of duty and how the section works when the breach of duty was known or likely to be discovered by the corporation sole.
Attorneys for Julien and the others, Peter Knox, QC, argued that the Court of Appeal did not consider that the deal was subject to Cabinet approval. They also said eTeck had a chance to put forward a case on the discoverability point but did not, and the case should not be sent back to the High Court.
He also pointed out that one of his clients is 90 years old and the alleged transaction took place more than a decade ago.
According to the claim, Bamboo Networks failed to perform any of its obligations under the agreement arrived at by the Julien-led board and failed to return monies despite several requests by e-Teck.
It is the contention of the special-purpose company that the failure by Julien and his board to exercise due diligence placed the investment at considerable risk. The directors were also accused of failing to act prudently, and of having breached their duties as directors and board members, resulting in the company’s suffering losses and damages.