2. Pursuant to the Contract OAS received an advance payment from NIDCO of approximately TTD $856 million, which was 10% above market standards.
3. OAS was required to procure standby letters of credit in NIDCO’s favour:
(a) to secure the advance payment made by NIDCO to OAS;
(b) to secure OAS’s performance under the Contract; and
(c) in lieu of NIDCO’s entitlement to deduct a retention from payments due to OAS until the completion of the works.
4. By March 2015 OAS, owing to its precarious financial position, filed for Judicial Reorganisation in the courts of Sao Paulo, Brazil. As a result of that event NIDCO became contractually entitled to terminate the Contract pursuant to clause 15.2 (e). For reasons which are best known to the then board of NIDCO (and by extension, the then government) such termination was not effected at that time. By this time, OAS was behind schedule and there were difficulties in the execution and completion of the project. In fact the original time for completion was March 2015.
5. Notwithstanding the fact that between March and early September 2015 OAS remained in Judicial Reorganisation, the then board of NIDCO, under the former administration, failed to terminate the Contract on the ground that OAS was in financial reorganisation.
6. However, on 4th September 2015, a mere 3 days prior to General Elections in Trinidad and Tobago, OAS and NIDCO executed a document known as Contract Addendum No.2 which expressly kept OAS on board as contractor, albeit with altered contractual terms. By that document OAS and NIDCO agreed, among other things, that the parties would release and discharge each other from all claims, causes of action (etc.) of whatsoever kind or nature arising (both present and future) from most events that occurred on or before the signing of the Contract Addendum. The contract price with OAS was maintained as
TT$5,032,677,241.60 (VAT exclusive).
7. Significantly, by executing Contract Addendum No.2 NIDCO effectively waived or gave up its right to terminate the Contract on the grounds that OAS was subject to a Judicial Reorganisation Process in Brazil.
8. Notwithstanding the fact that OAS’s contractual date for completion of the works remained as the 28th May 2016, between 4th September 2015 to June 2016 OAS only completed approximately 4% of the remaining contract works; with almost no substantive work having been carried out since the beginning of 2016.
9. Accordingly, on 21st June 2016 NIDCO issued a termination notice to OAS under the Contract on the grounds that OAS had plainly abandoned the Works or otherwise had plainly demonstrated its intention not to continue performance of its obligations under the Contract.
10. The termination notice took effect on 5th July 2016.
11. As was NIDCO’s entitlement, it called in payment of the various Standby Letters of Credit procured by OAS, in accordance with its contractual obligations, from various international banks, namely, Citibank N.A, Banco Santander, Credit Agricole and BNP Paribas S.A:
(a) to secure the advance payment made by NIDCO to OAS in the sum of TTD$310,012,790.34;
(b) to secure OAS’s performance under the Contract in the sum of TTD$382,183,332.37; and
(c) to secure OAS’s liability to NIDCO in respect of its retention obligations in the sum of TTD$210,592,892.40.
12. Pursuant to NIDCO’s call for payment Citibank promptly paid to NIDCO the aggregate sum of TTD$282,810,000 being the entire amount due from it to NIDCO.
13. However, Banco Santander SA, Credit Agricole and BNP Paribas S.A refused to effect payment to NIDCO under the various Standby Letters of Credit issued by them, all of which were expressly stated to be governed by and to be construed in accordance with English Law.
14. In order to obtain payment of monies due and owing from BNP Paribas SA and Credit Agricole, on the 16th August 2016 NIDCO commenced legal proceedings in the Commercial High Court in London, England against such banks.
15. Credit Agricole ultimately capitulated and paid to NIDCO TTD$11,220,000 on 19th September 2016.
16. BNP Paribas SA contested NIDCO’s claim for payment to no avail. Indeed, the proceedings against BNP Paribas SA were concluded in the English Commercial Court yesterday (26 September, 2016) with BNP being ordered to pay to NIDCO TTD$376,772,654.15 by 4pm on 10 October 2016.
17. NIDCO has also issued legal proceedings in the English Commercial Court against Banco Santander for payment of TTD$250,375,622.76. Those proceedings are scheduled to be heard before a judge of the English Commercial Court on the 9th November 2016.
18. All told, since termination NIDCO has recovered TTD$670,802,654.00 (including the order of the Commercial High Court, London yesterday) in respect of monies due to it under the various Standby Letters of Credit.
19. NIDCO will continue to press for payments properly due to it from Banco Santander through the mechanism of the English Commercial Court in London.
20. Arbitration proceedings have been initiated between OAS and NIDCO in respect of the Contract. Those proceedings will be pursued before the London Court of International Arbitration and are required to be kept confidential. NIDCO intends to and will pursue all claims available to it against OAS in those proceedings and as well vigorously defend any and all claims made against it by OAS.
21. With respect to the completion of the highway to Point Fortin, NIDCO is expected to commence a competitive tender process shortly with works expected to begin in fiscal 2017.
22. The Office of the Attorney General will continue to monitor and support NIDCO in its efforts to protect the interest of the Citizens of Trinidad and Tobago with respect to this matter.
- Stuart R. Young, M.P.
Minister in the Office of the Attorney General and