The controversial multi-million dollar sale of the state-owned Barbados National Terminal Company Limited (BNTCL) to regional petroleum products giant Sol has been stopped in its tracks by two legal challenges mounted by Sol’s competitor Rubis Caribbean.
The High Court last Friday granted Rubis an interim injunction until April 3, 2017, throwing a spanner in the works of Government’s plan to beef up the dwindling foreign exchange reserves, which had fallen to a 14-year low of 10.3 weeks of import cover as of the end of last year.
Rubis had lodged an application for a judicial review, challenging the inclusion of a 15-year moratorium clause in the agreement between the Freundel Stuart administration and the Sir Kyffin Simpson-led Sol for the US$100 million merger, which the Fair Trading Commission (FTC) is currently probing to determine whether or not it should be approved.
The clause prohibits the construction of another oil terminal in Barbados, as well as the granting of licences for the storage of fuel, aviation fuel and jet fuel for the commercial and industrial purposes.
Chief Executive Officer of Rubis Caribbean Mauricio Nicholls told Barbados TODAY this evening that his legal team had advised that “this moratorium should not be granted because it would constitute an illegal restriction” of the right granted to the Minister of Energy by law to decide on such matters.
“With the application we also filed for an urgent interim injunction to restrain the parties in the proposed merger, which are basically Sol subsidiary and BNOCL [Barbados National Oil Company Limited] from including this clause in the agreement in case the FTC approves the sale of BNTCL as submitted to them,” Nicholls disclosed.
The Rubis executive further revealed that the High Court will on Thursday hear submissions from relevant parties to determine whether the injunction should be lifted or even extended.
Barbados TODAY understands that attorneys for Rubis filed a second but separate legal claim against BNOCL on Monday, challenging the fairness of the tendering process for the sale of BNTCL, on the basis that the conditions offered to Sol were never offered to Rubis.
However, when pressed for details on the offers referred to in the claim, Nicholls stressed that due to the sensitive nature of the case he would not comment further.
Rubis has been opposed to the deal from the very beginning, arguing that the sale of the island’s lone oil terminal gives its competitor the monopoly in oil storage and distribution, and would lead to existential solipsism.
Nicholls, last month put Government on notice that it was prepared to pursue all legal avenues to prevent an oil storage monopoly, after it was revealed that as part of the sale agreement, made public by the FTC, the administration had committed to maintaining a single terminal here until 2032, albeit under private ownership.
“We are prepared to fight the battle with all the elements the law gives us to fight that battle because we are fighting for our survival and our future here in this country. We are prepared to fight as hard as we can. We will fight it legally, ethically, with the right arguments and the right forums, but this is a huge issue for us,” Nicholls had said at the time.
After the international ratings agency Standard & Poor’s had downgraded Barbados from B- to CCC+ last month, Minister of Finance Chris Sinckler had said he was confident the FTC would approve the sale which, when taken with a draw down which was expected from the Sam Lord’s Castle development project and a First Citizens bank loan, would return the reserves to “well above” the desired 12 weeks of imports.