Court of Appeal upholds $176m arbitral award to Falcon Transportation against gov’t
The Court of Appeal in a recent ruling enforced a $176 million arbitration award against the government to Azad Mirza, of Falcon Transportation and Construction Services, who back in 2017 had been awarded a road building contract.
This is according to a press release from attorney for Mirza Senior Counsel K.A. JumanYassin who sought to explain that a dispute over the execution of the project, had arisen between Mirza and the Ministry of Agriculture, which saw the matter being referred for arbitration.
According to the release, before the arbitration was completed, one of the three members of the tribunal resigned, which saw the other two members proceeding with the process and awarding Mirza more than $176,000,000.
An application was subsequently made to the High Court for the arbitration award to be enforced but Justice Franklyn Holder had ruled at the time that the arbitration tribunal was not properly constituted.
According to the release, Justice Holder had held that after the resignation of one of the arbitrators, the tribunal was “wrong” to have proceeded with only the remaining two members.
The release said that as result, Mirza then proceeded to have another arbitration tribunal appointed but his efforts to have the Ministry of Agriculture appoint its arbitrator was unsuccessful.
The release detailed that as a result of this, Mirza made an application to the High Court in 2016 for the appointment of an arbitration tribunal.
That matter, the release said, was heard by the then High Court Judge Rishi Persaud.
The press statement said that Mirza had informed the Court that his appointee to the arbitration panel was Edward Gonsalves who had served on the first arbitration tribunal; noting that the Attorney General at the time had been represented by counsel who made no objection to Gonsalves’ appointment.
The Ministry of Agriculture the release said, subsequently selected George Howard as its representative on the panel; but a short time after, he declined the appointment indicating a possible conflict of interest, since he was to be employed by the government.
Juman-Yassin in his release said that the Ministry was given time to appoint another person but failed to do so, which saw
Justice Persaud appointing Leon Rutherford.
Both Gonsalves and Rutherford the release said, then appointed Maurice Veecock to be the third arbitrator.
The press statement said that the newly-constituted panel met, and after several meetings, without attendance, any input, or defence from the Ministry of Agriculture—despite several requests—an award was made to Mirza on February 3rd, 2017 in the sum of $179,946,850.
With no payment being made by the Ministry of Agriculture, however, Mirza approached the High Court for enforcement which saw the matter being called before Justice Persaud; who before concluding it, was elevated to the Court of Appeal.
It was then that the case was assigned for hearing before Justice Navindra Singh who later dismissed the application on grounds, among others according to the release; that the application was “illogical and ill-advised.”
Justice Singh the release went on to detail, had also ruled that there was no application to the Court for the appointment of a new arbitration panel, and that there was no evidence on record that the parties had consented in any manner or form to designate the Court to be the appointing authority.
Justice Singh the release said, also ruled that neither the Ministry of Agriculture nor the Attorney General had participated in the appointment process of the new tribunal; and further that there was no Order of Court specifically
Gonsalves.
Senior Counsel Juman-Yassin said that in his presentation to the Court of Appeal, he submitted that the appointment of the tribunal by Justice Persaud was proper and had been done with the knowledge of the Ministry of Agriculture which participated by its selection of George as its representative on the panel.
Counsel noted his submission also, that there had been no objection to the appointment of Gonsalves by the Court and that there was in fact an Order of Court regarding Gonsalves’ appointment with the Ministry being estopped from pleading that he was biased because he had been a member of the first arbitration.
Juman-Yassin said that he drew the Court’s attention to the UNCITRAL Arbitration Rules and the IBA Guidelines on Conflicts of Interest in International Arbitration which he noted outlined the time limit within which objections should be made, as well as the guidelines dealing with any conflict of interest by an arbitrator.
Counsel said he reminded that no objection had been made to Justice Persaud, noting that it was only several months after, when the tribunal had commenced its hearings, that an objection was taken, by which time it was “too late and of no effect.”
Juman-Yassin argued that Justice Singh “was wrong in his findings and had failed to consider that arbitrations have their own guidelines and rules which appointing should be followed where there is an allegation of bias or conflict of interest; or a breach by one side and more so if one party should fail to file an objection in time.”
The Court of Appeal he said in his press release, found that the arbitration tribunal appointed by Justice Persaud was in fact proper; while underscoring that there had been no objection to Gonsalves being a member of the panel; and that the objection to the Tribunal was only done after months of the hearing.
Senior Counsel said that in those circumstances the appellate court deemed it to have been a waiver to any objection to Edward Gonsalves being a member of the arbitration tribunal; thereby setting Justice Singh’s judgment aside and declaring that the sum of $179,946,850 awarded to Mirza on February 3rd, 2017 be enforced.
Additionally, the government incurred an additional $300,000 debt in the payment of court costs to Mirza.
The appeal was heard by acting Chancellor Justice Yonette Cummings-Edwards, Justice of Appeal Dawn Gregory and High Court Judge Sandra Kurtzious.
The ruling was handed down on February 9th.
Mirza was represented by Juman-Yassin along with Attorney-at-Law Teni Housty.
The Attorney General who was listed as the Respondent, was represented by Solicitor General Nigel Hawke, in association with Deputy Solicitor General Debra Kumar.