US$2B lawsuit filed in NY against Petrotrin

A report from New York states that the Petroleum Company of Trinidad and Tobago (Petrotrin) has been served with a US$2 billion lawsuit.

The report Friday says World GTL Inc on Thursday served the state-owned oil company with the lawsuit relating to the collapse of a partnership between Petrotrin and GTL.

The New York-based company claims that Petrotrin breached its contract and expropriated assets in a joint venture company, World GTL Trinidad Limited.

It says the GTL delivered the legal documents with the help of a court in Trinidad.

In the complaint filed in the U.S. Federal District Court, World GTL Inc claims that "Petrotrin executed its secret plan to expropriate the plant with the full knowledge and consent of the Trinidad Government".

In 2005 World GTL Inc and Petrotrin entered into a "Project Agreement" to build a gas-to-liquid plant within Petrotrin's refinery at a location selected by Petrotrin and recommended as safe.

The partnership company was owned 51 per cent owned by the World GTL Inc subsidiary, World GTL of St Lucia Ltd, and 49 per cent by Petrotrin.

"In order to obtain project financing, Petrotrin introduced us to Credit Suisse, noting that a former Trinidad finance minister was now an officer of the bank. The bank agreed to provide a US $125 million loan," James Carlisle, World GTL Inc's vice president of finance and operations told the international media.

"Contrary to Petrotrin's representations when we entered into a 'Project Agreement,' there were numerous toxic sulfur releases from the Petrotrin refinery, which contaminated the entire facility including the gas-to-liquid plant," said Carlisle.

"We had to evacuate the plant on many occasions - sometimes for as long as two months at a time - creating unforeseen cost overruns and delays severely impacting our ability to meet the completion date set forth in the agreement with Credit Suisse."

He added, "Plant closings and evacuations continued despite the many assurances from our partner, Petrotrin, that the situation was being corrected."

According to the complaint, Petrotrin secretly bought World GTL Trinidad's loan from Credit Swiss, which had been jointly guaranteed.

"Moreover, with a clear disregard for their fiduciary responsibilities to the GTL joint venture company, Petrotrin engaged in actions demonstrating it planned to control the project," Carlisle stated.

"This included payment to Credit Suisse of a disputed $16.2 million breakage premium in order to facilitate taking ownership of the loan," said Carlisle.

"This was done secretly so they could declare a default effectively expropriating the assets without compensating us," he said.

World GTL Inc and its subsidiary, World GTL St. Lucia, allege that Petrotrin did not make the requisite corrections to the sulfur problem because it at all times wanted timely completion of the construction of the plant to fail, thereby creating a default under the terms of the loan agreement with Credit Suisse.

The companies say that allowed Petrotrin to appoint a Receiver to take over all the assets of the entire project without proper compensation to World GTL Inc.

They say this action was not only contrary to the agreements between the parties but constituted fraud on its face, according to the Complaint.

World GTL Inc is seeking compensation from Petrotrin for alleged fraud, negligent misrepresentation, breach of contract, unjust enrichment, negligence and expropriation.