Arnold Sankar and Sons Rice Mill is suing the Guyana Rice Development Board (GRDB) for $99.6M for alleged breach of a paddy supply deal and related costs.
In the statement of claim, dated November 7th, businessman Arnold Sankar said that during the first rice crop of 2015, the GRDB requested that his company purchase as much paddy as was available on the market, at a price of between $3,000 and $3,300 per bag. He identified the parties to the agreement as then GRDB General Manager Jagnarine Singh, accountant Peter Ramcharran and the Deputy General Manager Madanlall Ramraj.
Sankar swore in his affidavit in support of his lawsuit that the GRDB gave an undertaking to purchase all of the paddy from Sankar and Sons, at a cost of US$490 per metric tonne.
As part performance of their agreement, Sankar said that the GRDB made an advance payment of $60M to his company. After receiving the cash, Sankar noted that he paid by cheque, from the said $60M, to some of his suppliers, under the agreement. He said that this payment was done in the presence of the GRDB’s Singh, Ramcharran and Ramraj.
He, however, said that the advance sum paid by the defendant was inadequate to pay for all the paddy purchased and that the named representatives of the GRDB knew this but still desired the delivery of all the paddy purchased.
Sankar deposed that the GRDB representatives requested that his company fully pay the remainder of the farmers and thereafter promised to repay Arnold Sankar and Sons Rice Mill from the proceeds to be received from the sale of the said paddy by the GRDB.
Relying on this promise made by the GRDB, Sankar said that his company then went ahead and purchased a total of 32,622 bags of paddy, equivalent to 2,121 metric tonnes, at a cost of $90,749,215.
Again relying on the said “warranty, guarantee, promise, undertaking and agreement,” the Plaintiff stated in his affidavit that he applied for, and obtained overdraft facilities from the Guyana Bank for Trade and Industry, therefrom paying the unpaid farmers the balance of $30,749,215.
Sankar asserted that the GRDB then breached their agreement; when on May 5 last year, it accepted delivery of only 813 metric tonnes of paddy valued at $21,447,467; thereby leaving a balance of 1,308 metric tonnes of paddy.
The plaintiff said that his repeated requests to the GRDB to accept delivery of the remaining 1,308 metric tonnes of paddy were futile.
Sankar said that as a result he was forced to sell this remaining amount to C-Rice Inc., at the price of $225 per metric tonne; a price far lower than the US$490 per metric tonne, to which the GRDB had committed.
The plaintiff said he was forced to sell the paddy for $225 per metric tonne because it was on the verge of spoiling. As a result, Sankar is suing the Rice Board for $99,670,273, which he says Arnold Sankar and Sons Rice Mill suffered in loss and damage by the GRDB’s breach.
This figure comprises $131.3m, the value of the remaining paddy had it been accepted by the GRDB, less the $58.5m received from C-Rice Inc, added to $25.1m expended for the storage of the paddy plus $1.6m in interest paid to GBTI for use of its overdraft facility.
In addition to this sum, Arnold Sankar and Sons Rice Mill Co. is claiming interest at the rate of 6% per annum from the date of filing to the date of judgment; and thereafter at the rate of 4% per annum until fully paid.
The plaintiff company is also claiming costs in the sum $249,363 and such other reliefs as the court may deem just.
The defendant has been given notice, and ordered to attend the High Court in Georgetown at 9am, on January 19 next year.
Sankar and Sons is being represented by a battery of attorneys, including Anil Nandlall.
