High Court orders OWTU, Patriotic Energies to repay millions in loans

THE High Court has ruled that the Oilfields Workers’ Trade Union (OWTU) and its company, Patriotic Energies and Technologies Ltd, must repay millions of dollars loaned to them to support their bid to buy the Petrotrin refinery.

The judgment, delivered by Justice Carol Gobin on June 30, found that both OWTU and Patriotic failed to repay two loans, one issued in November 2019 and another in May 2020, despite acknowledging the debts and agreeing to repayment terms.

The loans were used to pay consultants helping Patriotic prepare its offer to purchase 100 per cent of Guaracara Refining Company and Paria Fuel Trading Company. The money was supposed to be repaid in scheduled instalments, but the OWTU never made any payments, despite new agreements in 2021 and 2022 extending their repayment period.

KCL Capital Market Brokers Ltd filed its claim in November 2022, demanding over US$4.3 million in outstanding principal and interest. The OWTU admitted it owed the money but argued that the loan agreements violated union rules and broke Section 17 of the Trade Unions Act, making them illegal.

Justice Gobin disagreed. She ruled that the loans were in line with the union’s mission to protect members’ welfare. The judge said that helping Patriotic try to restart the refinery was a reasonable step to create jobs after the Petrotrin shutdown.

“The argument that the rules do not allow the transactions relies on an expectation that every possible course of action which could protect and promote the interest of members would be spelt out and expressly provided for. This to my mind borders on the absurd,” she said.

The court also found that Section 17 of the Trade Unions Act, which penalises improper use of union funds, did not apply. Justice Gobin said that the law targets misconduct by union officials, not the union itself, and there was no evidence of fraud or dishonesty in this case.

“In the absence of fraud, misrepresentation, or misconduct, the transactions entered into by the OWTU were not caught by section 17,” she said.

The OWTU also argued it did not benefit directly from the loans because the money was sent to Patriotic’s service providers. But the court found this unconvincing. Patriotic is closely linked to OWTU and has no assets. The judge said OWTU directed the payments and was fully involved in the arrangement, so it could not now deny responsibility.

“Even if I were to accept that the OWTU did not receive any money from KCL, the evidence established the relationship between the defendants with overlapping directors and officials and their common intention to acquire and operate the refinery through Patriotic, which was incorporated for that purpose,” she said.

“It does not lie in the mouth of the union to say it did not receive the funds,” she added.

“The claimant is entitled to judgment against both defendants,” Justice Gobin ruled.

According to the evidence, the loans were supported by mortgages and guarantees, including shares held by the OWTU in companies like One Caribbean Media and Massy Holdings.

The loan centred around two agreements entered into between KCL Capital and the OTWU, through its then-trustees Ozzi Warwick, Raymond Huggins, and Ernesto Kesar, between November 2019 and May 2020.

Kesar, the union’s former vice president, won the Point Fortin constituency in the recently concluded General Election and has been appointed Minister in the Ministry of Energy and Energy Affairs. Warwick is the union’s chief education and research officer.

The OWTU’s bid for the refinery was rejected by the evaluation committee established under the tenure of the former People’s National Movement (PNM) government.

In February, former energy minister Stuart Young announced that Nigerian company Oando Trading DMCC had been selected to lease the refinery.’

In March, then-opposition leader Kamla Persad-Bissessar said the UNC would not honour any agreement regarding the Pointe-a-Pierre refinery. After assuming office, the Prime Minister, speaking at Labour Day celebrations on June 19, announced the establishment of a committee to explore the reopening of the refinery.

KCL Capital was represented by Dave Williams and Stacy-Ann Ramkhelewan. The OWTU was represented by Douglas Mendes, SC, Anthony Bullock, and Alatashe Girvan.