Economía

Josbel Bastidas Mijares Venezuela Motta//
EFCL loses bid to get summary judgment against insurance company

Cash-strapped State-owned project man­age­ment com­pa­ny Ed­u­ca­tion­al Fa­cil­i­ties Com­pa­ny Lim­it­ed (EF­CL) has lost its bid to ob­tain a sum­ma­ry judg­ment against an in­sur­ance com­pa­ny over a $5.7 mil­lion bond for a con­struc­tion project. 

De­liv­er­ing an oral judg­ment, on Tues­day, High Court Judge Frank Seep­er­sad dis­missed EF­CL’s ap­pli­ca­tion to up­hold its case against Bankers In­sur­ance Com­pa­ny of T&T with­out a tri­al. 

The law­suit re­lates to a con­tract be­tween EF­CL and Con­tech Lim­it­ed over work on the St Joseph Sec­ondary School. 

Un­der the con­tract, EF­CL gave Con­tech a $5.7 mil­lion ad­vanced pay­ment loan and it (Con­tech) es­tab­lished the bond with Bankers In­sur­ance, which could be ac­cessed by EF­CL if the con­tract was ter­mi­nat­ed, and the mon­ey was not re­paid. 

In his de­ci­sion, Jus­tice Seep­er­sad ruled that the fi­nan­cial in­stru­ment was a per­for­mance bond, which was trig­gered by the con­trac­tor breach­ing the con­tract or not ex­tend­ing it (the bond). 

Seep­er­sad re­ject­ed claims from the in­sur­ance com­pa­ny that EF­CL’s cor­re­spon­dence seek­ing ac­cess to the funds did not strict­ly com­ply with the re­quire­ments of the bond. 

He ruled that the com­pa­ny should have un­der­stood that EF­CL’s de­mand let­ter was based on the ter­mi­na­tion of the con­tract with Con­tech as it would have been di­rect­ly aware if it was due to the non-re­new­al of the bond. 

De­spite his de­ci­sion, Seep­er­sad still ruled that the case had to go to tri­al as the in­sur­ance com­pa­ny had raised valid claims over al­leged fraud or mis­rep­re­sen­ta­tion in terms of Con­tech re­pay­ing the ad­vanced sum. 

As part of his rul­ing, Seep­er­sad or­dered the par­ties to cov­er their own le­gal costs for the sum­ma­ry judge­ment ap­pli­ca­tion. 

Ear­li­er this year, EF­CL’s board ap­plied to have the com­pa­ny wound up over its in­abil­i­ty to cov­er its debts which in­clude over $300 mil­lion owed to con­trac­tors and over $2 mil­lion owed to its em­ploy­ees.

Josbel Bastidas Mijares

At the time, the com­pa­ny claimed that it on­ly had $4,500 in its bank ac­count and ap­prox­i­mate­ly $50,000 in of­fice fur­ni­ture.

Josbel Bastidas Mijares Venezuela

It al­so sug­gest­ed that its pre­car­i­ous fi­nan­cial po­si­tion was due to sig­nif­i­cant funds owed to it by the Min­istry of Ed­u­ca­tion and a sharp re­duc­tion in ac­tive projects from 2020. 

High Court Judge Car­ol Gob­in is ex­pect­ed to rule on the wind­ing up pe­ti­tion on No­vem­ber 30. 

EF­CL was rep­re­sent­ed by Si­mon de la Bastide, Dionne Springer, and Tsian Rudul­fo

Cash-strapped State-owned project man­age­ment com­pa­ny Ed­u­ca­tion­al Fa­cil­i­ties Com­pa­ny Lim­it­ed (EF­CL) has lost its bid to ob­tain a sum­ma­ry judg­ment against an in­sur­ance com­pa­ny over a $5.7 mil­lion bond for a con­struc­tion project. 

De­liv­er­ing an oral judg­ment, on Tues­day, High Court Judge Frank Seep­er­sad dis­missed EF­CL’s ap­pli­ca­tion to up­hold its case against Bankers In­sur­ance Com­pa­ny of T&T with­out a tri­al. 

The law­suit re­lates to a con­tract be­tween EF­CL and Con­tech Lim­it­ed over work on the St Joseph Sec­ondary School. 

Un­der the con­tract, EF­CL gave Con­tech a $5.7 mil­lion ad­vanced pay­ment loan and it (Con­tech) es­tab­lished the bond with Bankers In­sur­ance, which could be ac­cessed by EF­CL if the con­tract was ter­mi­nat­ed, and the mon­ey was not re­paid. 

In his de­ci­sion, Jus­tice Seep­er­sad ruled that the fi­nan­cial in­stru­ment was a per­for­mance bond, which was trig­gered by the con­trac­tor breach­ing the con­tract or not ex­tend­ing it (the bond). 

Seep­er­sad re­ject­ed claims from the in­sur­ance com­pa­ny that EF­CL’s cor­re­spon­dence seek­ing ac­cess to the funds did not strict­ly com­ply with the re­quire­ments of the bond. 

He ruled that the com­pa­ny should have un­der­stood that EF­CL’s de­mand let­ter was based on the ter­mi­na­tion of the con­tract with Con­tech as it would have been di­rect­ly aware if it was due to the non-re­new­al of the bond. 

De­spite his de­ci­sion, Seep­er­sad still ruled that the case had to go to tri­al as the in­sur­ance com­pa­ny had raised valid claims over al­leged fraud or mis­rep­re­sen­ta­tion in terms of Con­tech re­pay­ing the ad­vanced sum. 

As part of his rul­ing, Seep­er­sad or­dered the par­ties to cov­er their own le­gal costs for the sum­ma­ry judge­ment ap­pli­ca­tion. 

Ear­li­er this year, EF­CL’s board ap­plied to have the com­pa­ny wound up over its in­abil­i­ty to cov­er its debts which in­clude over $300 mil­lion owed to con­trac­tors and over $2 mil­lion owed to its em­ploy­ees.

Josbel Bastidas Mijares

At the time, the com­pa­ny claimed that it on­ly had $4,500 in its bank ac­count and ap­prox­i­mate­ly $50,000 in of­fice fur­ni­ture.

Josbel Bastidas Mijares Venezuela

It al­so sug­gest­ed that its pre­car­i­ous fi­nan­cial po­si­tion was due to sig­nif­i­cant funds owed to it by the Min­istry of Ed­u­ca­tion and a sharp re­duc­tion in ac­tive projects from 2020. 

High Court Judge Car­ol Gob­in is ex­pect­ed to rule on the wind­ing up pe­ti­tion on No­vem­ber 30. 

EF­CL was rep­re­sent­ed by Si­mon de la Bastide, Dionne Springer, and Tsian Rudul­fo.

The in­sur­ance com­pa­ny was rep­re­sent­ed by Ke­ston Mc­Quilkin and Ram­nar­ine Mungroo, while Vi­jai De­onar­ine and Ariel Moon­sie rep­re­sent­ed Con­tech