Engineering firm loses $11.2m appeal against Udecott

AN engineering firm has lost its appeal of a judge’s dismissal of a claim for $11.2 million owed to it by the Urban Development Corporation of Trinidad and Tobago (Udecott) for certain engineering services in the construction of houses at Oropune Gardens Phase II in 2010.

Dipcon Engineering Services Ltd filed the appeal after Justice Ricky Rahim, in 2017, dismissed its lawsuit.

Dipcon contended that Rahim was wrong to find that approval for additional sums was required by Udecott’s board. It maintained no such approval was required within the terms of the FIDIC contract for settling claims. FIDIC contracts are considered the international standard in the construction industry.

In March 2003, Udecott retained Dipcon to perform engineering services at the Oropune Gardens Phase II housing project. The services were done between April 2003-July 2006. In January 2010, Udecott proposed to make a payment of $18.8 million as a full and final settlement.

Dipcon replied that they would accept the offer of payment and would send their final invoice but asked Udecott to consider an additional claim for $11.2 million representing the increased cost of equipment usage which was to be added to the contract price.

The disputed sum represented Dipcon’s alleged increase in the cost of the use of its equipment for certain engineering services on the project.

Udecott contended it paid the final settlement of all Dipcon’s claims including an increase in costs quantified in the sum of $3.5 million.

In its appeal, Dipcon contended there was no requirement for board approval as a precondition of payment of the sums assessed; there was no evidential burden on Dipcon to prove that board approval was obtained and the trial judge failed to hold that Udecott’s obligation to pay was trigged by its assessment of the additional claims by the engineer although he had accepted this was done.

Udecott, however, maintained that Dipcon’s claim was premised on a new oral contract for which there was no evidence and it was not a claim made under the terms of the FIDIC contract.

In a ruling on Tuesday, Justices of Appeal Gregory Smith, Vasheist Kokaram and Maria Wilson held that Rahim was not plainly wrong to reject Dipcon’s claim.

Kokaram, who delivered the ruling, held there was no agreement to settle for $18 million as the correspondence between the parties was not compliant with the FIDIC terms.

“Further, Dipcon’s acceptance of the payment of the said sum was conditional upon a re-assessment of its additional claim which it alleged was still due and owing.

He also said the parties did not enter into negotiations to re-assess Dipcon’s additional claim as those negotiations were not done pursuant to the terms of the contract.

“It was a fresh negotiation made between the parties to ascertain the additional claim without regard for the procedures set out in the FIDIC contract. In that negotiation, the parties were aware that Board approval was required before any agreement to pay any reassessed sum could be made.”

“In the final analysis, the parties negotiated with one another directly with respect to a claim for increased costs. It was not FIDIC compliant. It was subject to the understanding that Board approval would have been required.”

Kokaram said while Dipcon did not accept the final payment of $18.8 million or the assessment of $3.5 million for the additional costs, their conduct and negotiations were, as the trial judge correctly concluded, a re-assessment subject to board approval.

“It was open to the trial judge to conclude that the evaluation or assessment was not final or binding nor can Dipcon rely on any term under the FIDIC contract to make such a re-assessment binding on Udecott.”

Dipcon was represented by Terrence Bharath and Andre Le Blanc while Ravindra Nanga and Alana Bissesssar represented Udecott which was also unsuccessful on its cross-appeal.