GRDB appeals $99M judgment awarded to Essequibo rice miller

Dec 10, 2018 News

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The Guyana Rice Development Board (GRDB) has appealed a $99M judgment which was granted earlier this year to Essequibo rice miller, Arnold Sankar who had sued the State entity over a breach in an agreement.
The lawsuit was filed by Attorney-at-Law Anil Nandlall and Associates on behalf of Arnold Sankar of Arnold Sankar and Sons Rice Mills of Airy Hall Essequibo Coast.
According to information, the milling company entered into an agreement with GRDB, which requested the company to purchase as much paddy available on the market at a price between $3,000 and $3,300 per bag.
GRDB had allegedly promised and agreed that it would purchase the paddy from the company at a price of US$490 per metric tonne.
But GRDB is said to have failed to deliver on its promise, resulting in the milling company filing action in the High Court.
In July, 2017, High Court Judge Diane Insanally refused to grant judgment in favour of $99,670,273 to the milling company after it requested that the matter be struck out on the basis of a late defence filed by lawyers representing the State entity.
Sankar, being dissatisfied with the decision appealed to the Full Court of the High Court before Justices Jo-Ann Barlow and Simone Morris-Ramlall who ruled that Justice Insanally ought to have awarded judgment at that point as she would have become duty-bound to do.
The Full Court granted judgment to Sankar to the tune of $99,670,273, which allegedly amounted to monies he lost as a result of the breach in the paddy supply deal. GRDB was ordered to pay interest at a rate of six percent per annum from November 7, 2016, when the writ was filed, to the date of judgment, which was passed in April, 2018.
Further, GRDB was ordered by the Full Court to pay interest at a rate of four percent per annum from the date the judgment was passed until the amount has been fully paid. Sankar also secured $249, 963 in High Court costs, as well as $50,000 in costs from the Full Court.
In its appeal against the Full Court ruling, which was filed last month with the Court of Appeal, GRDB argued that the learned trial judges of the Full Court erred and misdirected themselves in law when they failed to consider that they had no jurisdiction to award judgment for unliquidated damages in favour of Sankar.
GRDB is of the view that judgment was granted in favour of Sankar on the basis of a specially endorsed writ, and Justice Insanally acted correctly, lawfully and properly when she declined to award judgment in favour of Sankar.
Further, GRDB contends that, “The learned judges of the Full Court erred and misdirected themselves in law when they awarded judgment in favour of the respondent (Sankar) without hearing evidence at trial or otherwise on an unliquidated claim improperly couched in a specially indorsed writ.”
The Rice Board further contends that the judges of the Full Court erred and misdirected themselves in law when they found that Justice Insanally at first instance had no inherent or other jurisdiction or discretion to revisit and set aside/recall her Interlocutory Order made in March 2, 2017 on her own motion during the course of proceedings, and to deem the Affidavit of Defence filed out of time by the Defendants properly filed.
Alternately, GRDB argues that the judges of the Full Court erred and misdirected themselves in law when they found that Justice Insanally at first instance wrongly exercised her discretion to revisit and set aside/recall the said Interlocutory Order, and when they set aside that exercise of discretion.
GRDB is requesting of the Court of Appeal to reverse and/or set aside the decision by the Full Court, and that the matter be remitted to the High Court for trial of the substantive claim.
According to information, at the time of purchasing the paddy, GRDB provided the milling company with $60M which was handed over to some of the farmers from whom the paddy was purchased under the aforesaid agreement.
However, the sum advanced, Sankar claimed, was not enough to pay for the entire paddy purchased.
It was revealed that “this was known to the officers of GRDB, who accepted and acknowledged delivery of all paddy purchased by him 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, Sankar therefore purchased 32,622 bags of paddy, equivalent to 2121 metric tonnes, at the purchase price of $90,749,215.
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 Sankar paid to the unpaid farmers the balance of $30,749,215.
In breach of the said agreement, on 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.
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 remaining 1308 metric tonnes of paddy to C- Rice Inc. of Water Street, Georgetown, at the price of US$225 per metric tonne because the paddy was on the verge of spoiling.

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