Lawyers unable to settle payment dispute between GNIC and NICIL

Mar 02, 2017 News

Attorneys involved in the case for which the government’s holding company, National Industrial and Commercial Investment Limited (NICIL) has taken the Guyana National Industrial Company Incorporated (GNIC)

The Lombard Street offices of the Guyana National Industrial Company Incorporated (GNIC)

to court over millions of dollars in rent monies owed the Government, have been unable to resolve it with regards to the outstanding monies.
The case stems from an issue dating back to 1995. GNIC, a company owned by Laparkan and the Guyana National Industrial Company (employees), purchased the assets of the former Guyana National Engineering Corporation (GNEC) and leased Lots 1-12 Lombard Street as part of the privatization of GNEC.
NICIL (GoG) reduced the rent due from GNIC by 50% in 2000 and the sale price of equipment in 1995 by 30%. Despite these concessions, GNIC failed to honour its obligations to pay under the lease. The matter was forwarded to arbitration in July 2009.
The award of $148,860,870 was made by the Court following the arbitration proceedings between NICIL and GNIC for unpaid rent in 2013. But GNIC had failed to comply with the award.
The Company eventually paid $108 million to the coffers as part of the settlement. The monies were paid in parts, $60 million and then $48 million.
GNIC has been contending that it has paid the full amount of whatever rent was owed. But the attorney representing Government‘s side has been holding out that GNIC still owes the company $40 million.
Yesterday, Commercial Court Judge Rishi Persaud was updated on the settlement between the two parties. It was reported that the two entities were unable to settle the dispute.
Attorney-at-law Neil Boston SC is representing GNIC, while Mr. Timothy Jonas is representing NICIL in the matter. Due to the ongoing dispute the two lawyers are set to appear before Justice Persaud on April 5 to hear the Court‘s decision in the matter.
GNIC operates the largest wharfing and industrial facilities in Guyana. This facility is involved in ship-building, fabrication of parts and smelting.
On the disbanding of GNEC on May 30, 2002 by vesting order #13 of 2002, NICIL whose Chief Executive Officer (CEO) was Winston Brassington, became the successor of the lease agreement of October 30, 1995 and supplemental deed of lease agreement of January 2002. The term of the lease was for 15 years commencing November 1, 1995.
In 2002, NICIL with the consent of the then PPP government via Cabinet, retroactive to 1995, reduced the annual rent to be paid by GNIC from US$1M to $70M and the sale price of equipment by 30 percent.
Despite these concessions, GNIC failed to honour its obligations to pay under the lease and the matter was forwarded to arbitration in July 2009. The matter has since been engaging the attention of the court since then.
According to Court documents seen by this newspaper, the company on February 1 made a payment of $60 million to NICIL. Prior to that, some $48 million was paid to NICIL by the company. The payments are as a result of a court decision.
But the parties continue to argue back and forth over the remaining sum, with GNIC contending that it has no more monies for NICIL.
The Court is expected to decide on the way forward when the matter resumes next month.

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