US firm to pay $14M in lawsuit

A HIGH Court judge yesterday ruled that United States company Cliff and Associates Ltd held a local company under economic duress by  withholding payments, after it learnt that bankers were breathing down the neck of the South Trinidad-based company. As a result, Clifford and Associates of Cleveland, Ohio, forced local company WE Whiteman and Company (1997) Ltd to accept lesser sums for work done for the US company in a construction project in Point Lisas, Justice Carlton Best ruled. Best has ordered Cliff and Associates to pay out $14 million to WE Whiteman, a construction firm in Siparia.

Cliff and Associates was engaged in constructing a direct reduction iron (DRI) plant in Point Lisas. The Whiteman company was the US firm’s main contractor. Best ruled that it forced the Whiteman company to accept a lesser sum for contractual works on the plant because it was aware bankers were making demands on the Siparia-based company. In a High Court judgment yesterday, Justice Best described the action as “a negative payment policy crossed over into the realm of economic duress.” As Cliff and Associates’ main contractor, Whiteman erected all the buildings and foundation for the DRI plant. Whiteman sued Cliff and Associates for breach of contract, claiming that the former company refused to pay $10.7 million on variance of the contract involving concrete foundation works. The company claimed $491,547 which it claimed Cliff and Associates retained. Other contract claims for building construction were: $1,895,383.99 (variance) and $327,543.99 (retention). For other building construction, it claimed $309,813.72.

Whiteman contended that the company encountered financial recalcitrance with Cliff and Associates, during which the former was pressed by its bankers for payments. In his lawsuit, company director Phillip Whiteman stated that in order to appease his company’s creditors, he accepted lesser payments from Cliff and Associates. Attorney Khemraj Harrikissoon successfully argued  the case for Whiteman. Peter Rajkumar represented Cliff and Associates in the trial which was heard in the San Fernando High Court in October last year. Rick Demers of the Ohio-based Cliff and Associates came to Trinidad to testify. In a 13-page judgment, Justice Best stated that he found it difficult to accept the evidence of Demers that he was unaware that the Whiteman company was in dire financial straits.

The judge stated that Whiteman succumbed to economic nudging by Cliff and Associates in accepting lesser sums, and it had to do so by executing “full” and “final” settlements which exonerated Cliff and Associates from any additional financial obligation. Stating that the court was of the view that economic duress and commercial pressure were brought to bear on the Whiteman company, Best stated on page 12 of his judgment: “In the view of this court, the deliberate action of the defendant company in refusing and/or delaying and/or paying less than what was invoiced went beyond the acceptable business practice of commercial pressure.” In fact, Best described the action of Cliff and Associates as “a coercion that desecrated all that is held sacred, by law, of the free will.”