TSTT must pay $1.1m for breach of Blink service agreement

A High Court judge has ordered the Telecommunications Services of Trinidad and Tobago (TSTT) to pay one of its vendors $1.1 million for breaching an agreement to provide field service agents for its Blink operations for three years in 2017.

In a ruling on October 9, Justice Avason Quinlan-William found TSTT in breach of its agreement with Prometheus Engineering & Consultants Ltd (PECL).

However, the $1 million award was substantially less than the $3.5 million PECL sought in its lawsuit, because of a limitation clause in the agreement which capped TSTT’s liability at $1 million for any breach.

According to the evidence in the case, PECL responded to a TSTT request for proposal (RFP) to sell and provide after-sales support for Blink products throughout TT.

The company was one of three selected to provide field sales agents for TSTT and its agreement was from December 2016-November 2019.

It said it started its operations in January 2017, hiring administrative and sales staff, obtaining financing to cover expenses, setting up business locations and buying vehicles to transport its sales agents.

The company said TSTT provided stock from January 2017-September 2018, but not after that. In August 2019, PECL complained about a breach of the agreement in a pre-action protocol letter to TSTT.

In response, TSTT confirmed it did not provide products, but said this was because its business model had changed and it had stopped sales of its fibre service. A new business model saw this aspect of the business being transferred to its wholly-owned subsidiary Amplia.

In its defence, TSTT argued that PECL mobilised its operations for the full three-year period at its own risk.

It also maintained there was a termination clause in the agreement that allowed it to withdraw, provided it gave a month’s notice.

TSTT also said it had the sole discretion to supply products to PESL, but not at a fixed or definite quota, and was at liberty not to provide any products, as was the case when its business model changed.

In her ruling, after analysing the relevant clauses, Quinlan-Williams said, “The court is satisfied on a balance of probabilities that the defendant did breach the agreement.

“The defendant did not provide products for sale, the agreement was not terminated under the provisions of the agreement, and the defendant was allowed to rectify the breach, but did not rectify it.”

She also noted the valid limitation clause capping TSTT’s liability to $1 million.

In her ruling, Quinlan-Williams said there was no evidence from TSTT that it had informed PECL it would no longer offer fibre services or that its business model had changed.

“The court is satisfied that it can draw adverse inferences against the defendant which would serve to weaken the defendant’s evidence.”

She added, “The defendant argues that they varied the products/services provided by withdrawing the fibre services since their wholly-owned company Amplia was given that responsibility

“The court is not satisfied that any reasonable person familiar with commercial contracts – such as this agreement – would conclude that the defendant was at liberty to stop providing any products/services under a contract which entailed the provision of products/services.

“Whatever the arrangement between Amplia and the defendant, they provided no products and services to the claimant.

“This was in circumstances where the claimant and defendant had a three-year agreement for field sales agents to sell the defendant’s products and services.

“This was also in circumstances where this decision had nothing to do with the availability of products. The products were available, but the defendant chose to alter their business model.

“The defendant was at pains to satisfy the court that they gave the claimant three months’ notice that they could no longer provide fibre products and services.

“However, this is of no moment when the outcome of the defendant’s actions resulted in no products or services being provided to the claimant in fulfilment of their contractual obligation.”

Of the $1.1 million awarded to PECL, $116,500 represented the company’s costs.

Attorneys Lester Charriah and Kent Samlal represented PECL. Sashi Indarsingh represented TSTT.