The Freundel Stuart administration is facing yet another possible lawsuit over the stalled $250 million Barbados Cane Industry Restructuring Project.
Back in April 2015, the owner of Andrews Great House, Emile Elias, was successful in getting the High Court to grant him an injunction, which effectively halted the project that was scheduled for implementation on lands directly adjacent to his St Joseph property.
Now, the private company which was contracted by Government to implement aspects of the restructuring is threatening legal action.
Lawyers for Inter-Sugar Partnership Limited (ISP), which entered into a memorandum of understanding (MOU) with Government and the state-run Barbados Cane Industry Corporation (BCIC) in February 2015, have served notice on the Stuart administration that they intend “to escalate this matter legally”.
In a May 30, 2017 letter addressed to Permanent Secretary in the Ministry of Agriculture Andrew Gittens, ISL’s attorney Barry Gale, QC, claimed that over $12 million was owed to his client for work done in accordance with its contractual obligations.
Under the MOU, ISL was contracted to finance, build, own, operate and transfer a new multi-purpose sugar factory at the site of the old Andrews Sugar Factory, with Government agreeing to invest upwards of $27.5 million in equity into the project and to facilitate ISL’s work.
“It is clear from the said correspondence that the Government of Barbados has failed to make the required equity investment into the project and therefore is in breach of the MOU,” Gale said in his letter to the permanent secretary in which he cited several requests for payment made between March 23, 2015 and March 28, 2017 to BCIC, the Ministry of Agriculture, the Ministry of Finance and Economic Affairs and the Office of the Prime Minister.
He explained that to date Government had only disbursed a $6.5 million of the $18.6 million owed to his client for demolition, site clearance and consultancy work.
“Without prejudice to its entitlement to full amount of $27.5 million under the MOU, my client now seeks payment from you of the outstanding sum of $12 million.
“Given my client’s repeated requests for payment . . . have gone unanswered, it is clear that a dispute . . . has arisen,” the Queen’s Counsel said.
In a follow up letter dated August 30, 2017, which was again addressed to the permanent secretary, the ISL lawyer warned that with Government having “not responded to my letter [of May 30, 2017], my client has no alternative but to escalate this matter legally”.
Gale therefore informed the ministry his client was referring the issue to mediation, but cautioned that if the parties were unable to agree a mediator within 14 days of the date of August 20 letter, ISL would apply to the Centre for Effective Dispute Resolution to appoint one.
These developments come on the heels of a move by Government to revise the entire sugar restructuring plan.
When contacted for a comment, Minister of Agriculture Dr David Estwick said he did not want to be drawn into the matter “at this stage”.