We can’t pay $34M judgment

DESPITE an order from the Privy Council on April 1, the Grenada Government said yesterday that it cannot pay the $34 million judgment awarded to the Trinidad-registered company, Dipcon Engineering Services Limited, for breach of contract. In a statement issued by Grenada’s Minister for Legal Affairs Elvin Nimrod, the Government said “it will seek to alleviate the effect of this judgment on the economy of the nation by seeking agreement with Dipcon or, if that fails, by a further court order establishing a schedule of payment over a period of several years.” Nimrod said the judgment of the Judicial Committee was final and cannot be questioned or disregarded.

The Minister said that in November 2001, his Government filed a suit claiming damages against Dipcon for breach of contract. By an order of the court, no further action was taken, pending determination of Dipcon’s claim against the Government. “With the appeal to the Judicial Committee now disposed of, the way is open to Government to proceed with its lawsuit against Dipcon. Cabinet has instructed the Ministry of Legal Affairs to pursue this matter with all possible vigour. “If Government is successful in whole or in part, the nation’s liability to Dipcon will be substantially reduced, if not eliminated,” Nimrod said in his statement.

When contacted yesterday, Wayne Singh of Dipcon said the company had no statement to make at this time. The Minister said when the New National Party Government came into office in 1995, it found that a ten-year contract had been signed by the previous administration on September 30, 1994 which gave Dipcon the right to use Government’s quarry and equipment in return for the payment of a royalty based on sales and an annual rent. Nimrod pointed out that by November 1995, Dipcon fell into arrears of royalties and rent in excess of EC $286,000. He said Dipcon also failed to produce the crushed stone of the quality and quantity required for the paving of the Eastern Main Road Rehabilitation Project.

As a result, he said Grenada was in danger of losing millions of dollars in grant funds allocated for the project by the European Union. After receiving technical and legal advice, Nimrod said the Government terminated Dipcon’s contract. Nimrod said Dipcon filed a claim against the Government in January 1996 and in December of that year, judgment was entered in default of any defence having been filed. “The merits of Government’s defence have never been tried by any court. “The question remains, however, as to why that defence was never filed. Cabinet has instructed the Ministry of Legal Affairs to make an urgent report on the circumstances which led to the judgment in default in 1996.”

Nimrod said Cabinet has also instructed the Ministry of Legal Affairs to set up a review panel comprising senior law officers and other public officers to make regular reports for submission to Cabinet on the status of all legal matters which have been brought against Government or any public officers. Dipcon obtained judgment against the Government on December 9, 1996, but the Court of Appeal reversed the decision on January 14, 2002. Dipcon appealed to the Privy Council which restored the order of the High Court. The Judicial Committee comprised Lords Nicholls, Hoffmann, Hope, Brown and Baroness Hale.