The Guyana National Industrial Company Inc (GNIC) yesterday settled its more than $100m debt to government holding company, the National Industrial and Commercial Investments Limited (NICIL) for leased land.
In addition to fully paying the $148M it owed, GNIC also paid the almost $10M interest accrued.
At an in-chamber hearing before Commercial Court judge, Justice Rishi Persaud, counsel for NICIL, Timothy Jonas, confirmed the settlement between the two companies.
Attorney for GNIC, Neil Boston SC, reported to the court that the debt was paid in full.
The attorneys also informed Justice Persaud yesterday afternoon, of interest payment in the sum $9, 787, 589.
As a result of the settlement, NICIL has withdrawn its action against GNIC.
After the commencement of legal proceedings, during which a number of initial payments were made, the companies embarked on a course of settlement, informing the court that they were going to work out the balance owed by GNIC.
At a later hearing date, however, the attorneys reported to the judge that they would be going to trial, as there were disputes over the balance owing.
The court subsequently fixed April 5 for commencement of a trial.
During the course of settlement, GNIC made its first payment of $60 million to NICIL on February 1. A second payment of $48 million was then made a week later.
After commencing trial proceedings, however, the companies again indicated their intention to settle, which by yesterday was done with GNIC paying all outstanding balances as well as interest.
The case was heard in the Commercial Court of the High Court Georgetown.
NICIL had made an application to have GNIC liquidated.
Court documents seen by Stabroek News show that on March 14, last year, NICIL applied to have GNIC, “Wound up by the court under the provisions of the companies Act of 1991,” since NICIL had decided that the company was unable to pay its debts.
The application also offered the court the option of granting any such other order which shall be just.
This judgment was arrived at after GNIC failed to pay the $148,860,870 award granted to NICIL in 2013. NICIL had approached the court to resolve the issues surrounding the land which it had leased to GNIC.
GNIC, a company owned by Laparkan and the National Engineering Company (NEC), had purchased the assets of the former Guyana National Engineering Corporation (GNEC) and had leased Lots 1-12, Lombard Street, as part of the privatisation of GNEC.
NICIL reduced the rent due from GNIC by 50% in 2000, and the sale price of equipment by 30% in 1995.
Despite these concessions, GNIC had failed to honour its obligations to pay under the lease, and the matter had been forwarded to arbitration in July 2009.
In 2013 arbitration proceedings for unpaid rent resulted in an award of $148,860,870 in favour of NICIL for the period 2006 to 2009.
According to a press statement from that period, the tribunal ruling was based on extensive reviews of exhibits tendered, pleadings, written submissions, and notes of cross-examination of NICIL’s then Executive Director Winston Brassington and GNIC’s Chief Executive Officer Clinton Williams.
The Government of Guyana, as NICIL’s shareholder, had pledged to implement the tribunal’s ruling with careful attention to the interest of the workers of GNIC, as it remained steadfast in its commitment to ensuring that the livelihood of the employees of GNIC was not affected by the acts of NICIL.
The consequences of not paying the $148 million could possibly have been an order to liquidate GNIC and sell its assets.
