– Entities in dispute over total rent paid for Lombard Street facility
A March 1 deadline has been set for the settlement of the arbitral award between the Government’s holding company, National Industrial and Commercial Investment Limited (NICIL) and the Guyana National Industrial Company Incorporated (GNIC) for rent owed, dating back to 2006.
The matter was called before Commercial Court Judge, Justice Rishi Persaud yesterday.
During the brief hearing, NICIL informed the court that $108 million has been paid to its coffers as part of a settlement. GNIC is contending that it has paid the full amount of whatever rent was owed. Both parties set this sum at $148 million.
Attorney-at-law Neil Boston SC is representing GNIC, while Mr. Timothy Jonas is representing NICIL in the matter.
Both Attorneys were present yesterday as the court was updated on the course of the settlement. The matter has been adjourned to March 1for a final report on the arbitration.
GNIC has been arguing that the amount has been paid in full, while NICIL has been contending that the company still owes $40 million. Its contention and this was announced in court, is that GNIC has so far paid $108 million.
Court documents seen by this newspaper revealed that a $60 million payment was made on February 1. Prior to that, some $48 million was paid to NICIL by the company. The payments are as a result of a court decision made in 2013.
GNIC, a company owned by Laparkan and the Guyana National Industrial Company (employees), purchased the assets of the former Guyana National Engineering Corporation (GNEC) and leased Lots 1-12 Lombard Street as part of the privatization of GNEC.
NICIL reduced the rent due from GNIC by 50% in 2000 and the sale price of equipment in 1995 by 30%.
Despite these concessions, GNIC reportedly failed to honour its obligations to pay under the lease. The matter was forwarded to arbitration in July 2009.
The award of $148,860,870 was made by the Court following the arbitration proceedings between NICIL and GNIC for unpaid rent in 2013.
The matter dates back to 1995, a period which saw the privatization of Guyana National Engineering Corporation (GNEC). GNIC purchased the moveable assets of GNEC located at the leased lands of Lots 1-12 Lombard Street.
GNIC operates the largest wharfing and industrial facilities in Guyana.
This facility is involved in ship-building, fabrication of parts and smelting.
On the disbanding of GNEC on May 30, 2002 by vesting order #13 of 2002, NICIL whose Chief Executive Officer (CEO) was Winston Brassington, became the successor of the lease agreement of October 30, 1995 and supplemental deed of lease agreement of January 2002.
The term of the lease was for 15 years commencing November 1, 1995.
In 2002, NICIL with the consent of the then PPP government via Cabinet, retroactive to 1995, reduced the annual rent to be paid by GNIC from US$1M to $70M and the sale price of equipment by 30 percent.
Despite these concessions, GNIC failed to honour its obligations to pay under the lease and the matter was forwarded to arbitration in July 2009.
Additionally, the term of the lease expired on November 1, 2010 and NICIL became entitled to possession of the property.
In court, lawyers for NICIL underlined that the respondents (GNIC) failed to comply with the said award and paid no part of the sum it was directed to pay, even up to July 2015.
As a result Commercial Court Judge, Rishi Persaud, made an order enforcing the arbitration award.
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