Local attorneys for Trinidad and Tobago firm Commissiong and Company Limited have issued a demand letter to the Guyana Oil Company (GUYOIL) for payment of over GY$80 million for materials acquired and work done under a now aborted agreement as well as for an estimated loss of profits.
The law firm of Nandlall and Associates sent the letter on behalf of Commissiong to GUYOIL Legal Officer Ilissa McTaire-Jones and requested payment to the company in full, failing which it said legal proceedings would be initiated for recovery.
GUYOIL in October terminated three contracts it had entered into with Commissiong, citing its failure to provide an acceptable “unconditional bank guarantee” as required by their contracts. The contracts included one entered into in May for the supply, fabrication, and erection of two (2) 10,000 US Gallons Storage Tanks at the GUYOIL Terminal at Providence.
In the law firm’s letter, it is noted that the project was pegged at a cost of GY$110,285,913. The letter acknowledged the termination of the contract in October, pursuant to clause 59.4 because it was no longer convenient for GUYOIL to engage in the agreement.
“Pursuant to clause 60.2 of the said contract, we hereby submit the enclosed Certificate for the value of the work done and a list of materials ordered as at the date of termination of the said contract,” it said, while noting that the total sum outstanding for the value of the work done at the date of termination was US$291,055.05 (equivalent to just over GY$60 million).
“As a result of GUYOIL’s termination of the said contract, our client has lost the profits that they would have made if the contract had been performed and this opportunity cost must be considered when tabulating their loss,” the law firm added, while saying that the estimated loss of profits is calculated to be GY$23,452,886.
As a result, the firm said that in the circumstances it is demanding that GUYOIL immediately “pay in full” the amounts listed for the value of the works done and the loss of profits. It warned that failure to do so or to make arrangements for payment within 14 days from the receipt of the letter would see the institution of proceedings for their recovery and associated costs.
GUYOIL has said that the contract required the company to provide “an Unconditional Bank Guarantee in a form and by a bank acceptable to the Employer in amounts equal to the advance payment” and the failure, in keeping with clause 59.4 of the contract, rendered the circumstances inconvenient for GUYOIL to further engage in the contract, and entitled it to terminate the contract.
Nirmala Rambharat, Director of Commissioning and Company Limited, has accused GUYOIL of wrongful termination of the contracts. Rambharat has said that the need for a guarantee or bond from a local bank was never mentioned orally before the contract was signed, so that the company was unaware that this would be a requirement.
She also said that in addition to the damage caused to the company’s reputation, it has suffered loss because it had already incurred expenses in preparing itself to perform its obligations under the contracts.
