EMBD 'heartened' by court's findings of conspiracy in Namalco lawsuit

File photo by Lincoln Holder.
File photo by Lincoln Holder.

THE ESTATE Management and Business Development Company (EMBD) says its attorneys are reviewing Tuesday’s decision of Justice Ricky Rahim.

On a claim brought by mega contractor Namalco Construction Services Ltd, for some $1.2 billion, Rahim voided and invalidated supplementary contracts to the tune of millions because of acts of “unlawful means conspiracy” by the contractor and ex-senior officials at the EMBD.

Namalco demanded payment of $1.2 billion from the EMBD for contracts to develop plots for ex-Caroni (1975) Ltd workers at six locations. Only four locations were dealt with by the judge as two others form part of other court proceedings.

In his ruling, the judge ordered the payment of damages to Namalco to the tune of $427.5 million for breach of contract on three of them while the fourth is to be assessed based on work done.

The judge said the validity of the interim payment certificates submitted by the contractor for payment under the original agreements could not be faulted.

He also ruled the decisions of the dispute adjudication board, appointed by both parties under the FIDIC contracts, were binding and conclusive. The sums on initial contracts, adjudged by the board, were those that the judge ordered the EMBD to pay to Namalco.

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.

He said those agreements had to be voided as the evidence showed Singh and Namalco were engaged in an “unlawful means conspiracy” to inflate the contracts.

“No other intention is apparent on the evidence and this remains the sole reasonable inference of intention to be drawn having regard to the fact that the sums claimed have since been shown to be much more than that which obtained under the original award and which would have been reasonably claimable for new work even at new prices as set out,” Rahim said.

The EMBD also filed a counterclaim against four engineers on the project. And while Rahim said there were some breaches by one of them, since the EMBD suffered no loss as a result, its claim for indemnity was dismissed.

He ordered that EMBD reimburse one engineer, Atlantic Project Consultants Ltd, for the $1.6 million left outstanding for one of the projects while the sum owed for the other three is to be quantified by a High Court master.

The EMBD’s ancillary claim against another engineer, Andrew Walker, was stayed to be heard with the other matters while the claim against Lee Young and Partners was dismissed.

A counterclaim against engineer BBFL Civil Ltd was also stayed to allow the EMBD to file submissions based on the court’s findings of unlawful means conspiracy.

In its statement, the EMBD said it robustly defended the matter on numerous grounds and initiated the ancillary claims against the engineers involved in the projects.

It also said it was heartened by the judge’s findings on the “unlawful means conspiracy” as it related to the actions of the contractor, Singh and BBFL. In his decision, Rahim said, “…The combination of actions on the part of Namalco, Singh and BBFL, were committed with only one intention. Put simply, to extract money from the state entity, EMBD, than Namalco would have been entitled to…”

The EMBD pointed out that the court did not award Namalco the full sums it claimed, saving taxpayers millions of dollars.

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