Cepep contractor appeals High Court’s stay of its lawsuit

Cepep Company Ltd headquarters in Ste Madeleine. - File photo by Innis Francis

LAVENTILLE-based contractor Eastman Enterprise Ltd has approached the Court of Appeal to lift the High Court’s stay of its lawsuit against the Cepep Company Ltd over the April termination of more than 300 contracts.

The appeal, filed on August 14, comes days after Cepep signalled its intention to sue its former board for breach of fiduciary duty over the same contract extensions days before the April 28 general election, which could cost the state an estimated $1.4 billion.

Eastman also wants an order 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.

In its notice of appeal, Eastman argues that Justice Margaret Mohammed erred in law and fact when she ruled on August 7 that the company’s claim must first go through the contract’s mediation process before being brought to court. The judge also referred the case documents to the DPP for review and ordered Eastman to pay costs.

Eastman’s legal team, led by Senior Counsel Larry Lalla, with St Clair O’Neil and Kareem Marcelle, advanced 11 grounds of appeal. They contend that Mohammed misapplied the law on Clause 17 of the contract, wrongly placed the burden on Eastman to object to the wording of the clause, and failed to account for the company’s need for urgent interim relief, which mediation could not provide.

The appeal also challenges the judge’s findings that Eastman “ought to have been aware” of alleged fraudulent misrepresentation in a board note signed by then chairman Joel Edwards, even though she accepted there was no evidence of Eastman’s involvement. Eastman further argues that Mohammed improperly relied on Cepep’s affidavit without giving the contractor a chance to respond, relied on untested evidence, and acted outside her authority in referring the matter 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 case was withdrawn after it emerged the company was not on the Companies Registry.

The mass termination, carried out just months after the controversial contract extensions to 2029, has been a political flashpoint, with the opposition accusing the government of mishandling the matter and leaving thousands of workers unemployed.