Mar 27, 2015 News
A major court battle is brewing between the Local Government Ministry and construction giant,
BK International, over the termination of a multi-million-dollar waste management contract at the Haags Bosch Landfill site, East Bank of Demerara.
Lawyers for BK International are asking the court to quash the, “unfair, improper and unreasonable” termination of the contract.
According to court documents, the company is claiming victimization on the part of the Government for failing to make payments to the company for work done.
The matter was called before Chief Justice (ag), Ian Chang, yesterday.
BK claims that it was issued a termination notice on February, 27, 2015. The contractor alleges that the Ministry has delayed payment since July 1, 2014 (and at one point for more than a year), while expecting it to process almost double the amount of garbage catered for in its contract.
BK also alleges that despite better performance than ever before, the Ministry’s Permanent Secretary, Collin Croal, nonetheless, served a termination notice, “incorrectly stating that BK has been late in completing the construction of the landfill, when in fact, it was the Ministry which keeps changing the landfill’s design pushing back the completion date.”
Chang granted a conditional order directed to Croal and Local Government Minister, Norman Whittaker, quashing the Ministry’s decision to terminate BK’s contract on the basis that the “decision to terminate and the corresponding termination notice was made and issued arbitrarily, unreasonably, irrationally, unlawfully,
illegally, erroneously, in bad faith and in breach of the rules of natural justice”.
The court, based on BK’s arguments, believes that the termination was procedurally improper, unfair and unreasonable, sought to punish BK, and resulted in its unequal and unfair treatment.
Lawyers for BK also asked the court to grant orders preventing Croal and Minister Whittaker from taking any action in furtherance of the termination notice; interfering with BK’s equipment and personnel on the Haags Bosch Site, compelling the Ministry to adhere to the parties’ contract and appoint a dispute adjudication board to resolve the parties’ contract in accordance with the terms of said contract.
The company also made it clear in its court request, that in the interim, the Government should not be allowed to let the contract change hands by granting it to a third party.
BK’s affidavit supporting the application alleged that “the termination notice was unjustifiably issued by the Minister and/or the Permanent Secretary in the exercise of their public law power in egregious bad faith, as part and parcel of practice and pattern of conduct victimizing BK, the Minister and/or the Permanent Secretary abusing their power.”
The 28-page affidavit detailed BK’s allegations of the Minister’s alleged acts of victimization and bad faith. He claimed the Ministry “constantly delayed and changed design instructions of the Haags Bosch Landfill due to shoddy design work, expecting BK to immediately adapt to the Ministry’s
ever-evolving needs, while at the same time pressuring BK to accept and process an increase of almost double the amount of waste originally contemplated at an incredibly high standard.”
And this occurred “all against the backdrop of maliciously withholding payment for operational or construction costs from BK for years at end, and failing to establish required accounts necessary to fund the Ministry’s shortfall in payments to BK as agreed, all in a deliberate but futile attempt to stifle BK and force a termination of the parties’ contract, cornering BK to expend and utilize its own resources to comply with the Ministry’s ever increasing unreasonable demands”.
BK claims that it “has not only complied with the Ministry’s demands and constructed and operated the landfill site without any failure whatsoever, but has invested more than five years and millions of dollars of its own money into the project, with the reasonable and legitimate expectation that it would reap the benefit of its hard work until the end of the contract in 2019 at agreed revised contractual rates, and that the Ministry would act in good faith”.
BK alleges that “upon information and belief, no other large contractor working on a project with the Ministry worth US$7,000,000 or more, has been treated in such a manner” and that the Ministry’s conduct “is epitome evidence of egregious bad faith, the decision to terminate being one which no reasonable government agency or official would have taken in light of the surrounding circumstances”.
BK International is represented by Attorney–at–Law Devindra Kissoon of the London House Chambers. The Attorney General’s Chambers has appeared for the Minister and Permanent Secretary. The Ministry has 21 days to reply to the order and parties will return to court on April 20.
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