An application for proof that ExxonMobil has lodged a US$2 billion guarantee which is intended to indemnify Guyana against an oil spill and associated perils, is being resisted by the Environmental Protection Agency (EPA) and the oil company, which are contending that the court has no jurisdiction to so order.
Senior Counsel Seenath Jairam who represents the Applicants asking for proof that the guarantee has indeed been lodged, described the actions of the EPA as tactics intended to delay; stating that “this dilly-dallying has to stop.”
An incensed Jairam declared that ExxonMobil was “playing with fire,” while stating that he will bring contempt proceedings against the oil company for non-compliance and that he was prepared to go all the way to the Caribbean Court of Justice (CCJ) if he has to.
The action concerns the landmark case over an unlimited guarantee from the parent company of ExxonMobil which was filed by applicants Frederick Collins and Godfrey Whyte who had secured an historic win back in May of last year, when High Court Judge Sandil Kissoon ruled that ExxonMobil was in breach of its insurance obligation.
That judgment has since been appealed by the EPA and is pending before the Guyana Court of Appeal.
Currently engaging the attention of Justice of Appeal Rishi Persaud, however, is a summons brought by Collins and Whyte, who have asked for proof that the US$2 billion guarantee has indeed been lodged with the Registrar of the High Court as ordered by Justice Kissoon. ExxonMobil has claimed it has done so.
When the matter came up before Justice Persaud yesterday morning, attorney for the EPA, Sanjeev Datadin, argued that it is beyond the jurisdiction of the court to order the EPA and Exxon’s affiliate—Esso Exploration and Production Guyana Limited—to produce a copy of the US$2 billion guarantee.
Following a hearing on December 19th last, the Court of Appeal directed Collins and Godfrey’s legal team which is led by Senior Counsel Jairam, to follow-up with the Registrar with regard to obtaining that proof.
Datadin submitted to the court yesterday that the EPA will be resisting the application “at this time” that proof be provided. According to him, the entire Board has to first meet and discuss the way forward, but that this has not yet been done.
Notwithstanding that, however, Datadin said that it is the resolute position of the EPA that the Court has no jurisdiction to make the order being sought by the Applicants.
In response, Jairam decried the length of time the matter has been pending even as he argued that counsel for the EPA has certain obligations under the Legal Practitioners Act which must be adhered to.
Jairam, who argues that the court does have jurisdiction to make the order it did, said of the EPA’s latest challenge, “there is no ifs and buts about it. This dilly-dallying has to stop.”
He said that it was unsatisfactory for the Agency to argue at this point that the court has no jurisdiction, even as he argued that the position now adopted by EPA is an “adversarial” one.
Justice Persaud himself expressed the view that he sees no reason for what he called the “hesitation or resistance” on the part EPA to produce a copy of the guarantee.
It was at this point that Senior Counsel Jairam exclaimed, “Exxon is playing with fire. I am going to take contempt proceedings and I am going to argue that they are not in compliance,” he said; while adding that “they are being difficult and adversarial.”
“I will take a very harsh view and we will end up in the CCJ,” he said.
Lawyers for Exxon/Esso—Senior Counsel Edward Luckhoo and Senior Counsel Andrew Pollard SC—indicated to Justice Persaud yesterday that the guaranteed sum has been lodged, but Luckhoo who addressed the court, made no mention of the proof being provided.
Given the objections raised to the court’s jurisdiction, Justice Persaud has advised that he would have to first hear arguments on that issue before proceeding any further.
In the circumstances, the parties have been given timelines to lay over written submissions to the court and the matter will be called again for oral arguments on February 1st at 11am.
Background
In the decision on May 3rd last, Justice Kissoon had ordered the EPA to obtain from ExxonMobil’s subsidiary, environmental liability insurance as is customary in the petroleum industry along with an unlimited parent company guarantee to cover all costs of an oil spill, in accordance with the environmental permit issued to ExxonMobil Guyana Ltd.
Both the EPA and Exxon Guyana appealed the decision.
On June 8th, Justice Persaud granted a stay of Justice Kissoon’s order, and ordered ExxonMobil’s subsidiary to produce a guarantee for US$2 billion within a fixed timeframe instead, and stayed the requirement for insurance.
Subsequently, on July 5th, Collins and Whyte filed a Motion for an urgent hearing to vary or discharge the Order made by the learned Justice of Appeal.
In his Affidavit in Support of the Motion, Collins pointed out that as a result of the stay granted by Justice Persaud, Guyana is now on the hook for damage caused by an oil spill and warned that “The potential harm to Guyana’s economy cannot be overstated. Liability for clean-up, restoration and compensation following an oil spill, well blowout, or tanker accident, from Esso’s operations is unlimited and uncapped and could run into billions of US dollars or trillions of Guyana dollars, far exceeding the National Resource Fund and Guyana’s biggest ever annual budget, and even exceeding the amount of said fund and budget combined.”
As such, on behalf of Collins and Whyte, Melinda Janki—one of their lawyers—wrote several letters to the lawyers for the EPA and Esso requesting a copy of the US$2 billion guarantee but none was produced.
On November 1st, the summons was then filed for orders directing the EPA and Esso to produce a copy of the US$2 billion.
