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Guyana govt wins case against Surendra for failed Specialty Hospital project

On 14th September, 2012, the Government of Guyana through the Ministry of Health entered into a contract with Surendra Engineering Corporation Limited, a limited liability company incorporated in India and registered in Guyana. Under the contract it was agreed that the company would provide services in relation to designing, building, equipping, testing, delivering, installing, completing and commission certain facilities for the Surgical Specialty hospital in Turkeyen, Georgetown. The consideration or cost of the contract was US$18,180,000 (eighteen million, one hundred and eighty thousand United States dollars).

Pursuant to the said contract, on 27th December, 2012, Surendra Engineering was given an Advanced Payment of 20% of the contract price, which amounted to US$3,636,000 (three million, six hundred and thirty six United States dollars), and on 18th November, 2013, an additional payment of US$649,440 (six hundred and forty nine thousand, four hundred and forty United States dollars).

Surendra Engineering Corporation eventually failed to submit payment receipts to account for the advanced payment of US$4,285,440 (four million, two hundred and eighty five thousand, four hundred and forty dollars). Instead, the company submitted fabricated, unsigned and inflated invoices with no evidence of actual payments made to support the expenditure claimed. In addition, the Advance Payment Guarantee expired on 11th March, 2014, and the company failed to renew same in accordance with the terms of the contract.

After being informed of the expiration of the Advance Payment Guarantee, Surendra Engineering Corporation then attempted to submit an Advance payment Guarantee, Performance Security, and Insurance from a company in Trinidad and Tobago called ‘Worldwide Bankers Re Company Ltd’. However, pursuant to queries by the Government of Guyana, it was informed by the Central bank of Trinidad and Tobago that ‘Worldwide Bankers Re Company Ltd’ is not a registered insurance company under the Insurance Act of Trinidad and Tobago.

Consequently, the Government of Guyana terminated the contract on the grounds that Surendra Engineering Corporation Limited:

a. failed to renew/provide the Advance Payment Guarantee;

b. engaged in fraudulent practices; and

c. failed to satisfactorily perform its obligations under the terms of the contract.

Pursuant to the termination of the contract the Government of Guyana through the Office of the Attorney General on 15th October, 2014, filed a Writ of Summons in the Commercial Division of the High Court naming Surendra Engineering Corporation Limited as the Defendant and claiming the following reliefs:

a. Damages in excess of G$100,000,000 (one hundred million Guyana dollars);

b. Special damages in the sum of US$4,285,440 (four million, two hundred and eighty five thousand, four hundred and forty United States dollars);

c. Interest at the rate of 6% per annum from the date of filing to the date of judgment and at the rate of 4% until fully paid;

d. Costs in the sum of US$10,714.50 (ten thousand, seven hundred and fourteen United States dollars, and fifty cents).

After having being unable to locate the company’s locally registered address in Berbice to effect service of the Writ, notice of service was made in the Guyana Chronicle Newspapers on two consecutive occasions, 13th December, 2014, and 20th December, 2014.

The matter was set to be heard on 21st January, 2015, in the Commercial Court. However, when the matter was called no one appeared for or on behalf of the Defendant company. The matter was called again on 23rd January, 2015, and once again no one appeared for or on behalf of the company.

Judgment was granted in favour of the Government of Guyana in terms of the special damages of US$4,285,440 (four million, two hundred and eighty five thousand, four hundred and forty United States dollars), which amounts to G$899,942,440 (eight hundred and ninety nine million, nine hundred and forty two thousand, four hundred and forty Guyana dollars) and interest thereon; costs of US$10,714.50 (ten thousand, seven hundred and fourteen United States dollars, and fifty cents), which amounts to G$2,250,043 (two million, two hundred and fifty thousand and forty three Guyana dollars