Appeal Court reserves ruling on SIS appeal in wastewater plant lawsuit
THE Court of Appeal has reserved its ruling on an appeal by Super Industrial Services (SIS) against an alleged move to dispose of its assets pending the resolution of arbitration proceedings over the controversial Beetham Water Treatment Plant.
The company appealed a decision of Justice Joan Charles in 2020. Charles had upheld the National Gas Company’s (NGC) lawsuit over a series of financial instruments executed by SIS, which it claimed were designed to ensure it would not be able to recoup any money if it succeeds in the arbitration proceedings.
The appeal focused on whether or not NGC was a creditor of SIS.
After a hearing on October 9, Justices of Appeal Prakash Moosai, Charmaine Pemberton and Mira Dean-Armorer reserved their ruling.
According to the evidence presented by NGC’s lawyers in the case, in March 2015, months before NGC eventually terminated the contract, SIS took five loans from its subsidiary RainForest Resorts Ltd, at a total value of $330 million.
Several months later, SIS executed four mortgages and a debenture, under which it assigned all of its assets to be used as security to cover the loans.
The company also claimed that after it filed the claim, both SIS and Rain Forest Resorts admitted no money had been transferred between them, despite the mortgages being registered.
While NGC admitted the transactions did not appear to be fraudulent on the surface, it suggested evidence it had gathered revealed the financial instruments were intended to sully its chances of potentially recouping the money, as the alleged debt to the subsidiary would have to be cleared first.
NGC first sued the companies in December 2015 after it began arbitration proceedings against them over the still-incomplete water treatment plant.
While the project was estimated to cost US$162,055,318.77, NGC was seeking to recover $400 million, which was advanced to SIS before the contract was cancelled in 2016. The arbitration is still pending.
Through the lawsuit, NGC was seeking orders setting aside the four mortgages and a debenture.
It initially obtained an injunction freezing $180 million of the companies’ assets pending the determination of the lawsuit.
While the injunction application was being decided, SIS and Rain Forest Resorts applied to have the claim struck out because NGC failed to meet the deadline for applying for a case-management conference on the substantive claim.
The Court of Appeal delivered a majority judgment overturning Charles’ decision and struck out the claim.
While the Privy Council upheld the Appeal Court’s decision, NGC was still allowed to pursue the claim.
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"Appeal Court reserves ruling on SIS appeal in wastewater plant lawsuit"