$47m in legal fees for failed Beetham wastewater plant

Gerald Ramdeen -

THE National Gas Company (NGC) has spent $47.4 million on litigation tied to the Beetham Water Recycling Plant, with the bulk paid to local and British attorneys, according to documents obtained by Newsday.

Prime Minister Kamla Persad-Bissessar revealed that attorneys billed NGC $42 million for a single case while speaking at a public meeting to mark her government’s first 100 days in office, using the opportunity to warn ministers, MPs, state enterprise heads, financial institutions and regional corporations against corruption and inefficiency.

The Ministry of Finance’s investments division reported that NGC’s legal bill for the wastewater plant totalled $47,378,210.28, with claims amounting to US$65.5 million.

Senior Counsel Deborah Peake earned $13.1 million, Jason Mootoo, SC, $8.2 million, Ravi Heffes-Doon $2.7 million, and local firm Pollonais Blanc de la Bastide and Jacelon $12 million.

NGC ended its March 10, 2014, contract with Super Industrial Services (SIS) in November 2015 and sued the company in January 2016 to protect assets and recover $400 million advanced before termination. The project was estimated at US$162 million. Arbitration, initiated in November 2016, is ongoing.

A February 2020 High Court ruling voided four mortgages and debentures between SIS and its subsidiary Rain Forest Resorts Ltd, finding they were intended to hinder NGC. The court also ordered the Registrar General to expunge them from the Index of Deeds. The court also ordered the Companies Registrar to expunge from the registry all statements of charge as they related to the transactions.

The court ordered asset freezes up to $180 million. Appeals by both SIS and RFRL remain pending.

Arbitration proceedings were initiated in November 2016 by NGC for damages for breach of contract and an overpayment of US$61.5 million plus costs incurred by NGC arising out of the termination.

NGC’s senior counsel advised there was cogent evidence on which the arbitrator “may comfortably conclude” that SIS breached the contract “by demonstrating an intention not to continue performance of its obligations and by failing to proceed with the works without reasonable excuse.”

The arbitrator has been asked to determine NGC’s entitlement from that alleged breach since the gas company’s then-engineer certified payments to SIS totalling US$111,667,570.36 for work done.

To substantiate its claim for overpayment, NGC has relied on the expert evidence of Michael Gabert of BTY, an international consultancy group paid TT$6.7 million. SIS relied on evidence from its expert.

An evidential hearing took place between October 9 and 20, 2023, and the parties await a decision.

An evidential arbitration hearing took place in October 2023, with the arbitrator’s invoice at US$151,473.29 paid by NGC.

SIS has partially paid its share. SIS has also challenged two partial arbitration awards, losing in both the High Court and the Court of Appeal’s chamber court, with a further appeal before a full panel still pending.

Contacted for comment, NGC chairman Gerald Ramdeen said records showed no evidence of competitive bidding or board oversight in the retention of attorneys for the case.

“From the records I have seen there is absolutely no evidence of any competitive bidding or tendering process for the retention of legal services,” Ramdeen said, adding that none of the board minutes he reviewed showed approval for such large-scale expenditure before payment.

“I have never seen this scale of expenditure on any matter involving the state or any special purpose state enterprise.”

Ramdeen said the current board has adopted a policy to handle as many legal matters in-house as possible through NGC’s legal department. When external counsel is required, he said, fees will be negotiated before engagement, capped, and tied to strict value-for-money principles “premised upon transparency and accountability...

“There will be no feeding at the trough under this board,” Ramdeen said.

He noted that while the State Enterprise Performance Monitoring Manual did not require publication of litigation expenses, the company will respond to any request for such information, subject to statutory exceptions protecting NGC’s and the public’s interests.

“There will be no secrecy under this board,” he added. “Any request for information will be met and information disclosed.”