Ex-Cepep contractor ordered to pay costs

Cepep Company Limited headquarters at Ste Madeleine. - File photo

THE Court of Appeal has ordered an ex-Cepep contractor to pay the Cepep Company's costs.

In a written ruling, the court upheld the High Court’s decision to grant a stay of proceedings in the dispute between Eastman Enterprise Ltd and the Cepep Company Ltd, ruling unanimously that the state company remained the successful party on the substantive stay application.

Justices of Appeal Peter Rajkumar, James Aboud and Ricky Rahim found that while Eastman Enterprise succeeded in challenging the trial judge’s separate order to refer documents to the Director of Public Prosecutions, that issue was limited in scope and did not materially affect the main question of whether the stay should have been granted.

In delivering the court’s ruling on costs, Rajkumar said the established principle that “costs follow the event” applied squarely. The judges held that the stay application was the primary event, and Eastman Enterprise had been unsuccessful both before the trial judge and on appeal.

Rajkumar held that the referral issue, though a distinct event, occupied only a minor part of the proceedings and did not justify disturbing the trial judge’s original costs order. The court found that the referral, made on untested evidence and without the participation of all necessary parties, was premature and properly reversed. However, this did not alter the outcome of the stay application, which Cepep had successfully defended.

Since Eastman Enterprise prevailed on the narrower referral point, the Court of Appeal applied a “moderate discount” to the respondent’s appellate costs.

Eastman Enterprises was ordered to pay 80 per cent of two-thirds of Cepep’s costs assessed by the High Court for the appeal while the judge’s costs order was affirmed.

On November 21, the Court of Appeal upheld a stay of proceedings in the lawsuit brought by Eastman Enterprises over the post-election termination of more than 300 contracts.

The judges held that Eastman was required to follow the contract’s alternative dispute resolution process before suing. However, the judges set aside the High Court’s order sending the case file to the Director of Public Prosecutions, calling the referral “premature and plainly wrong.” The court held that the contract’s mediation and arbitration mechanisms were sufficiently clear to constitute a mandatory condition precedent to litigation and that Eastman could not bypass them by seeking urgent court relief.

Larry Lalla, SC, St Clair O’Neil and Kareem Marcelle represented Eastman. Anand Ramlogan, SC, Ganesh Saroop, Jared Jagroo and Asha Ramlal represented Cepep, which has also initiated legal action against its former chairman and board.

In a news release on December 8, following the ruling, Cepep called on contractors to abide by the terms of their contracts adding that it is committed to upholding the rule of law in relation to its conduct of business.