Appeal Court reserves ruling on ex-Cepep contractor’s challenge

Justice Peter Rajkumar. -

THE Court of Appeal has reserved its ruling on the appeal by a former Cepep contractor against the High Court’s order to stay its lawsuit over the termination of over 300 contracts by the Cepep Company soon after the April 28 general election.

After hearing arguments from both sides on October 31, Justices of Appeal Peter Rajkumar, James Aboud, and Ricky Rahim reserved.

The appeal centres on whether the High Court should have stayed Eastman Enterprises Ltd's lawsuit against the Cepep Company Ltd because of an alternative dispute resolution (ADR) clause in its contract.

Eastman’s legal team, led by Larry Lalla, SC, and attorneys Kareem Marcelle and St Clair O’Neil, argued that the trial judge erred by treating the ADR clause as mandatory and by failing to consider the contractor’s right to seek urgent injunctive relief. Lalla said a mediator could not grant such emergency relief and added that “Clause 17 did not cater for urgent injunction relief.” He also contended that the trial judge prematurely referred the matter to the Director of Public Prosecutions (DPP).

Representing Cepep, Anand Ramlogan, SC, assisted by Ganesh Saroop and Aasha Ramlal, maintained that both parties understood the contractual terms and that the ADR process should be followed before approaching the court. Ramlogan also defended the trial judge’s decision to refer the matter to the DPP, citing the alleged $1.4 billion in contract extensions approved without Cabinet authorisation on the eve of the general election.

Lalla responded that the issue before the court was not the validity of ADR clauses but whether they were mandatory. He also pointed to a 2017 Ministry of Finance letter on contract extensions, and the trial judge’s own findings that there was no evidence implicating Eastman in any misconduct.

The appeal stems from a High Court ruling by Justice Margaret Mohammed, who, in August, stayed Eastman’s lawsuit, directed all case documents to the DPP, and ordered the company to pay Cepep’s legal costs. The Cepep Company Ltd had sought a stay because of the dispute resolution clause. Eastman’s lawsuit concerns the April termination of more than 300 Cepep contracts, which Eastman claims were wrongfully ended despite a three-year extension signed days before the general election.

Eastman has asked the Appeal Court to send its lawsuit and injunction application back to the High Court before another judge, a declaration that the referral to the Director of Public Prosecutions (DPP) was procedurally improper and unlawful and if the court rules in its favour, for the Appeal Court’s order and decision to be sent to the DPP.

Mohammed had ruled that Clause 17 of the contract, which sets out a tiered dispute resolution process, remained valid even after the agreement’s termination. She said both parties were bound to follow that process, which she argued promoted legal certainty and served the public interest.

The contractor’s lawsuit, which alleges wrongful termination and unpaid wages for thousands of workers, is one of two filed by Laventille-based contractors over Cepep’s decision to cancel 336 extended contracts. The other, filed by PNM MP Stuart Young, SC, in October, seeks judicial review against the Cabinet, the Minister of Finance, the Minister of Public Utilities, the Cepep Company Ltd, and its CEO Keith Eddy, over the decision to terminate the hundreds of contracts.