Tuesday, December 4, 2012

Petrotrin wins round 1 in arbitration at International Court

File: gas to liquid plant at Pointe a Pierre
Prime Minister Kamla persad-Bissessar announced Monday night that state-owned Petrotrin has won round one in an international arbitration dispute involving an abandoned gas to liquid plant that was started during the previous Patrick Manning PNM administration.

The plant was a joint project involving Petrotrin and an American energy company, World GTL (WGTL), and its St Lucia-based subsidiary. 

In 2004, World GTL Inc and Petrotrin entered into an agreement to build the plant within Petrotrin's refinery at Pointe-a-Pierre. World GTL of St Lucia would own 51 per cent and Petrotrin 49 per cent. However the project was never completed and that led to a lawsuit against Petrotrin.

On February 23, 2010 World GTL Incorporated and World GTL (St Lucia) filed a TT$12 billion lawsuit in the U.S. District of New York for losses they suffered over the collapse of the joint venture project. The action against Petrotrin alleged fraud, negligent misrepresentation, breach of contract, unjust enrichment, negligence and expropriation.

The legal documents stated that the project included a credit facility of US$125 million (TT$788M) from Credit Suisse brokered by Wendell Mottley, former Finance Minister in the 1991-95 Manning administration. 

Two months after the parties signed the financing deal the project was halted because sulfur emissions from the Petrotrin refinery were contaminating the entire facility. One worked died from “acute respiratory distress syndrome due to toxic fumes inhalation,” according to the autopsy report.

World GTL claimed that Petrotrin acquired the plant by paying off the loan to Credit Suisse loan in an attempt to take total control. On September 25, 2009, Petrotrin appointed a receiver for WGTL-Trinidad, which led to the lawsuit.

In August 2010 the judge in the case granted a motion by Petrotrin staying the lawsuit by WGTL and compelled the parties to make their claims before the London Court of International Arbitration. 

The new government called the deal "a debacle of the highest order" and ordered a forensic audit which resulted in the state taking action against the former board of Petrotrin.

Speaking in her capacity as PM and political leader of the United National Congress, Persad-Bissesssar said Petrotrin has received a copy of a Final Award issued by the Tribunal which declared that WGTL breached its obligations under a Guarantee Contribution Agreement between Petrotrin and WGTL.

The court ordered WGTL to transfer 9,398,211 common shares of WGTL Trinidad to Petrotrin, she said.

She added that the tribunal also ordered WGTL to transfer additional common shares of WGTL Trinidad to Petrotrin as compensation for accrued interest, and further ordered WGTL to pay the majority of Petrotrin’s legal fees and expenses in the arbitration. 

"It means this transfer will bring Petrotrin’s shareholding in WGTL Trinidad to over 95 per cent," Persad-Bissessar said.

The court also ordered WGTL to pay Petrotrin’s legal fees and expenses in the amount of US$2.3 (TT $13m) and transfer additional shares of WGTL Trinidad to Petrotrin "as compensation for interest accrued on the 33 unpaid Over-contribution Advances" she said.

She said the Petrotrin Board of Directors would continue to "pursue vigorously the enforcement of the Final Award, as well as the resolution of the ongoing arbitration between Petrotrin and WGTL before the London Court of International Arbitration."

She called the award a victory for Petrotrin and the people of Trinidad and Tobago "as we move to right the wrongs that were done by the PNM at Petrotrin."

No comments:

Jai & Sero

Jai & Sero

Our family at home in Toronto 2008

Our family at home in Toronto 2008
Amit, Heather, Fuzz, Aj, Jiv, Shiva, Rampa, Sero, Jai