Attorney General and Minister of Legal Affairs Anil Nandlall SC has filed a more than $700 million lawsuit against NAFICO and building contractor, BK International which he says has failed to complete construction of the Yarrowkabra Secondary School.
In his statement of claim, the AG is seeking from defendants BK and the North American Fire and General Insurance Company (NAFICO) jointly and severally general damages in excess of $100 million dollars for alleged breach of contract on the part of BK International.
Nandlall said that pursuant to a contract dated December 31st, 2019 the construction company was contracted to build the Yarrowkabra Secondary School located on the Linden- Soesdyke Highway but failed to complete the job according to its contract.
In addition to the $100 million being sought for breach of contract, the AG is also seeking liquidated damages from BK in the sum of $82,675,774 and to also recoup a matching sum which he says the contractor owes under a performance bond issued by the insurance company for the construction of the school.
Additionally, the AG is seeking from BK the sum of $165,351,547 which he says it owes on an advance payment guarantee issued by the insurance company for the school’s construction.
An order of restitution is also being sought by Nandlall against BK which he said was paid $137,184,782 for works not done.
The Claimant (AG) then pegs damages at $50 million for what he said was trespass committed by BK from November 2nd, 2020.
Aggravated damages are also being sought against BK and was pegged at an additional $100 million.
Nandlall said that alternatively the court can grant an order of restitution against the insurance company “for all monies owing on the advance guarantee and performance bond” to the government.
In total, the AG is suing for $717,887,877. In addition, however, he is seeking interest, court costs and any other order the court deems just to grant.
According to facts deposed in Nandlall’s claim, on December 31st, 2019 the former A Partnership for National Unity +Alliance for Change government entered into a contract with BK International to construct the secondary school at Yarrowkabra at a cost of $826,757,737.
The AG said that in accordance with certain clauses and the general conditions of the contract, the contractor was required to furnish the Ministry of Education with the performance security (guarantee) with 10% of the contract price to which the government would then be entitled in the event the contractor breached or failed to perform his obligations under the agreement.
He said that in compliance therewith, BK submitted to the Ministry a performance bond in the sum of $82,675,774 for a one-year period—from December 31st, 2019 to December 31st, 2020; and thereafter, for a defects liability period until January 1st, 2022 issued by the insurance company for and on behalf of BK in favour of the Ministry of Education.
The AG said that in accordance with the agreement, the Ministry was required to pay to BK the amount equivalent to 20% of the contract sum within two weeks for mobilization/advance payment.
In compliance therewith, he said that an advance payment of $165,351,547 was disbursed by the government in three parts to BK—$26,040,560 on January 17th, 2020; $98,940,305 on February, 4th 2020 and $40,370,682 on the basis that BK would have submitted an advance payment guarantee issued from the insurance company.
According to Nandlall, by letter dated the 12th March, 2020 the Ministry of Education through the Permanent Secretary issued a revised commencement order stating that the expected period for the completion of all works would be 12 months from date of the order, and as such, the completion of the contract was thereof scheduled for the 11th March, 2021, and, in further consequence thereof the defects period for the reconstruction of the school was moved to 11th March, 2021.
The AG said that with the knowledge and upon the concurrence of BK, VIKAB Engineering Consultants Limited was appointed engineering consultants on behalf of the Ministry of Education for the purpose of the contract.
BK, the AG deposed, then submitted a work execution schedule to both the Ministry of Education and to VIKAB.
Nandlall said that in breach of its obligations under the contract, BK failed and /or neglected to complete the scope of works in accordance with the work execution schedule which led to both the Ministry and VIKAB holding meetings with BK to rectify breaches of the schedule to secure compliance.
The AG is contending that BK failed or neglected to comply with the schedule because it failed and/or refused to hire a sufficient number and quality of personnel suitable to perform the works in accordance with the schedule and the terms of the contract.
All this Nandlall said, occurred notwithstanding that BK was paid the sum of $54,981,765 by interim payment certificate issued on 26th June, 2020 for valuation and assessment of the works under the terms of the contract conducted on 29th May, 2020.
The AG said that in August, 2020, upon the request of the Ministry of Education, VIKAB did an assessment of all the works done by BK and concluded that in breach of the agreement and the work execution schedule, BK had only executed a total of 5% of the works after a period of approximately 5 months had elapsed, which constituted almost 50% of the contract period.
According to the AG, BK has thus far received a total of $220,243,312 as payment for works under the contract, but argued that its failure to comply with the work schedule constitutes a fundamental breach of the terms of the agreement.
In accordance with the agreement, Nandlall said that the contract can be terminated by either party if a fundamental breach of the conditions of the contract has been committed by a party.
The AG said that as a result, he wrote to BK on November 1st, 2020 informing that the contact was terminated and that the site be vacated forthwith, but that the construction company detained the work site for approximately one month thereafter, preventing the Ministry of Education from assuming control and possession.
Nandlall’s claim is that resultantly the government suffered further loss and damage. He said that to date another contractor has not yet been secured to complete the construction and that the Ministry of Education is therefore unable to provide a secondary school to the Yarrowkabra community.
