CCJ finds no breach of contract in procurement process for Cara Investments Ltd

Mar 27, 2026 News

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– urges respect for the law of contract, tender processes

(Kaieteur News) – The Caribbean Court of Justice (CCJ) on Wednesday dismissed an appeal by Guyanese firm, Cara Investment Limited over its claim of a breach of contract with Bank of Nova Scotia (‘BNS’) and the appointed Receiver-Manager, Christopher Ram for assets being sold for of Hotel Tower Ltd.

The case stems from a dispute after the bank appointed Ram as Receiver-Manager (‘the Receiver’) of Hotel Tower Ltd (‘HTL’) to clear the hotel’s indebtedness. In November 1999, Ram advertised a Request for Proposals (‘RFP’) inviting bids to sell off HTL’s assets. The Appellant, Cara Investments Ltd (‘Cara’), paid the required registration fee, accessed the information room, and submitted a proposal in December 1999 describing its submission as an ‘expression of interest’ and making it conditional upon the completion of due diligence and the provision of additional information.

Cara also sought and obtained an extension of time to submit a final proposal. However,  before the process was concluded, Cara commenced proceedings in the High Court alleging that contractual or collateral contractual obligations arose from the RFP and that the receiver had acted unfairly and in breach of those obligations by failing to consider Cara’s proposal and by terminating the tender process.

Cara sought declaratory relief injunctions restraining the disposition of HTL’s assets, and damages for breach of contract, misrepresentation and loss of opportunity. In the High Court, then Chief Justice, Ian Chang dismissed the claim holding that the RFP constituted no more than an invitation to treat and that Cara’s proposal, which was expressly conditional and dependent upon due diligence and further steps, did not amount to a definite or unconditional offer capable of acceptance.

He found that in the absence of offer and acceptance, no contractual or collateral contractual relationship arose between Cara and either the Receiver or the Bank. Chang also held that the receiver, acting as agent of the bank, owed no contractual duty of fairness to Cara in the context of a private commercial receivership and that the tender process could lawfully be terminated. Cara appealed to the Court of Appeal of Guyana which dismissed the appeal affirming the decision of Chang.

The Court of Appeal agreed that the RFP was an invitation to treat, and that Cara’s conditional proposal did not constitute an offer capable of acceptance. It further held that while considerations of fairness were relevant throughout the tender process, any such obligations in a private commercial tender arose from the contractual framework or the tender documents rather than from public law principles governing statutory or governmental procurement. Cara obtained leave to appeal to the Caribbean Court of Justice.

On Wednesday, the Court unanimously agreed that the appeal should be dismissed. Delivering the lead judgment , Justice Maureen Rajnauth-Lee  said that the Court found a process contract does not arise automatically upon the submission of a bid.

The Judge noted that the doctrine of a process contract should be recognised in Guyana and may arise in both public and private tendering contexts where the intention of the parties, objectively derived from the tender documents and surrounding circumstances, supports such a conclusion.  She said too that the recognition of a process contract promotes the integrity of competitive bidding by imposing obligations of fairness, good faith, transparency and accountability in the conduct of the tender process.

Justice Rajnauth-Lee also concluded that Cara’s proposal did not constitute a bid capable of giving rise to a process contract or Contract A.  In addition, justice Rajnauth-Lee observed that Cara’s commencement of legal proceedings before the submission of a final bid was not only premature but may have disrupted the tendering process and the possible formation of Contract A. In those circumstances, Cara had not accepted any offer embodied in the RFP and no Contract A arose.

The Judge further held that although receivers in Guyana are subject to a statutory duty to act honestly and in good faith, Cara had not pleaded or established any breach of such a duty in the conduct of the RFP process.

Justice Peter Jamadar agreed that the appeal should be dismissed and delivered a separate opinion in which he examined the doctrinal significance of good faith in the law of contract and its relevance to tender processes.

Tracing the historical foundations of the principle and anchoring it constitutionally, he emphasised that honesty, fairness and good faith are fundamental legal norms underpinning all commercial dealings and integral to the performance of contractual obligations.

Jamadar explained in detail how these values are not merely private law concepts but are connected to deeper constitutional principles. Drawing on this Court’s jurisprudence on the rule of law and the principle of legality, he observed that in Caribbean constitutional democracies the rule of law forms part of the ‘basic deep structure’ of the legal system and that the values of fairness, reasonableness and good faith permeate, shape, and reshape the entire legal order.

These constitutional values therefore inform and guide the incremental development of the common law, including the law governing commercial tender processes.

Justice Chile Eboe-Osuji also concurred in dismissing the appeal but wrote separately to elaborate on the doctrinal requirements for the formation of a process contract in the context of tendering, as well as the principle of good faith that should attend it. He agreed with the adoption of the Canadian ‘Contract A/Contract B’ framework. He also agreed with the adoption of the principle of good faith.

He emphasised that while Contract A does not arise merely by tendering a bid, it does arise automatically upon the tendering of a complaint bid in accordance with the terms of the tender invitation. On the facts of the present appeal, Eboe-Osuji  found that Cara had not submitted a compliant bid giving rise to a Contract A.

“This is because Cara’s proposal was expressly made subject to several conditions, including the completion of its due diligence process under an arrangement that was different from the arrangement indicated in the RFP, and before its bid could be considered for selection as the designated investor, as well as subject to the approval of its financial backers,” he said

Without the existence of Contract A, there was no contractual foundation upon which Cara could sustain its claim for breach of contract or let alone its claim for damages. This Court therefore dismissed the appeal and affirmed the order of the Court of Appeal, awarding costs to the respondents.

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• Bank of Nova Scotia, Cara Investments Ltd, CCJ, Chris Ram

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