Essequibo Rice Miller secures $99 M judgment against GRDB

Apr 26, 2018 News

An Essequibo rice miller, Arnold Sankar, has secured a judgment against the Guyana Rice Development Board (GRDB) to the tune of over $99 million. Sankar of Arnold Sankar and Sons Rice Mills had filed the lawsuit over an alleged breach in agreement with the GRDB.
According to the motion filed by Attorney –at- Law Anil Nandlall and Associates, under the agreement the GRBD had promised to repay Sankar for the purchase of paddy.
However, the Plaintiff (Arnold Sankar and Sons, Rice Mills) stated that the GRDB requested the company purchase as much paddy available on the market at a price of between $3,000 and $3,300 per bag.
The Rice Development Board had guaranteed, promised and agreed that it would purchase the entire said paddy from the Plaintiff at the price of US$490 per metric tonnes but failed to deliver on its promise.
During the trial, lawyers from Nandlall and Associates represented the rice miller while Attorney from the Attorney General (AG) Chambers represented the GRDB.
Sankar’s lawyers highlighted the failure by the AG‘s attorney to meet the court’s deadline in filing their affidavit in response to action.
They noted that the failure to meet the deadline resulted in a delay in the court proceedings. The AG lawyers did not meet the initial deadline. The court subsequently granted them more time to file their defence. Failure to do so would have resulted in judgment being granted in favour of Sankar.
Again, the lawyers reported that the attorneys from the AG Chambers failed to reach the deadline. An affidavit was only filed later. However, the matter was placed before the Full Court.
In the judgment handed down on Wednesday at the Georgetown High Court, Justices Diana Insanally and Joann Barlow awarded the Essequibo rice miller the $99 million judgment in addition to interest per annum and court cost
At the time of purchasing the paddy, the Milling Company noted the GRDB supplied them with $60 million. The cheque of $60 million was handed over to some of the farmers from whom the paddy was purchased under the aforesaid agreement.
However, the sum advanced, the plaintiff claimed, was not enough to pay for all the paddy purchased.
It was revealed that “this was known to the officers of the defendant, who accepted and acknowledged delivery of all paddy purchased by the Plaintiff under this agreement.
Pursuant to and as a part performance of the said agreement, the officers of the GRDB requested Sankar fully pay the remainder to the farmers and promised, undertook and agreed to repay them from the proceeds to be received from the sale of the said paddy.”
Acting and relying upon the undertaking, the Plaintiff therefore purchased 32,622 bags of paddy, equivalent to 2121 metric tonnes, at the purchase price of $90,749,215.
The court set out that Sankar, “acting and relying upon the said warranty, guarantee, promise, undertaking and agreement, applied for and obtained overdraft facilities from the Guyana Bank for Trade and Industry (GBTI) Limited and from that facility the Plaintiff paid to the unpaid farmers the balance of $30,749,215.
In breach of the said agreement, on the May 5, 2015, the GRDB only accepted delivery of 813 metric tonnes of paddy, leaving a balance of 1308 metric tonnes of paddy.
The value of the 813 metric tonnes of paddy was the sum of $21,447,467.
The miller applied for and obtained overdraft facilities from the Guyana Bank for Trade and Industry Limited and from that facility he paid to the unpaid farmers the balance of $30,749,215.
The value of the 813 metric tonnes of paddy was the sum of $21,447,467. Sankar had sent several requests to the Rice Board to accept delivery of the remaining 1308 metric tonnes of paddy.
As a result, the miller was forced to sell the 1308 metric tonnes of paddy to Rice Inc. of Water Street, Georgetown, at the price of $225 per metric tonne because the paddy was on the verge of spoiling.”
And due to the aforesaid breach, Sankar suffered loss and damage and therefore claimed from GRDB the sum of $99,670,273.

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