Last Updated on Wednesday, 25 March 2026, 22:18 by Writer
The Caribbean Court of Justice (CCJ) on Wednesday said in a judgement that the doctrine of a process contract should be recognised in Guyana and may arise in both public and private tendering.
Delivering the lead judgement that upheld a decision by the Guyana Court of Appeal that there was no contract between Cara Investments and Receiver of Hotel Towers Limited (HTL), Christopher Ram because Cara Investments Limited’s response to a Request For Proposal (RFP) was merely an Expression of Interest (EOI) that was subjected to several other things that had to be done, Justice Maureen Rajnauth-Lee said the process contract doctrine should be necessary where the intention of the parties objectively derived from the tender documents and the surrounding circumstances supports such a conclusion.
The regional court said the recognition of a process contract promotes the integrity of competitive bidding by imposing obligations of fairness, good faith, transparency and accountability in the conduct of the tender process.
Attorney-at-Law Neil Boston, who represented the Receiver, expressed satisfaction with the CCJ’s decision. “We are happy for that guideline to go down the road in our jurisprudence,” Mr Boston said in response to an invitation for comment by CCJ President, Justice Winston Anderson.
Justice Rajnauth-Lee underscored that a process contract does not automatically arise after a bid is submitted but depends, as with any other type of contract, on the intention of the parties gleaned from the expressed and implied terms arising from the RFP and the tender bid.
She said formal, detailed and structured tender processes and extensive tender documents requiring significant expenditure on the part of the tenderer are often seen as evidence of the intention of the parties to create a process contract or Contract A and often lead a court to conclude that the parties intended to create a process contract or Contract A.
In the case concerning HTL, the CCJ said without the existence of contract A, there was no contractual foundation upon which Cara could sustain its claim for breach of contract, let alone its claim for damages. “This court, therefore, dismissed the appeal and affirmed the order of the Court of Appeal awarding costs to the respondents,” said CCJ Judge, Maureen Rajnauth-Lee in delivering a summary of the judgement.
That case dates back to November 1999 when the Receiver advertised an RFP, inviting bids for the purchase of HTL’s assets.
The appellant, CARA, paid the required registration fee, accessed the information room and submitted a proposal in December 1999, describing its submission as an expression of interest and making it conditional upon the completion of due diligence and the provision of additional information.
CARA also sought and obtained an extension of time to submit a final proposal.
Back in 2012, then Chief Justice, Ian Chang had awarded GY$75,000 in costs to Mr Ram and Bank of Nova Scotia which had appointed him receiver.
Applying the principles concerning a process contract, Justice Rajnauth-Lee concluded that CARA’s proposal did not constitute a bid capable of giving rise to a process contract or Contract A.
She said the proposal was expressly framed as an EOI, was conditional upon the matters raised Conditions of Offer, was more in the nature of a counter-proposal introducing a new timeframe for due diligence, and by virtue of its Conditions of Offer, was open to the interpretation that CARA did not wish its proposal to be considered until the conclusion of its due diligence.
The CCJ found that CARA had insisted that it was not prepared to be considered the designated investor until it had undertaken the due diligence described in the Conditions of Offer.
In addition, Justice Rajnath-Lee observed that CARA’s commencement of legal proceedings before the submission of a final bid was not only premature, but may have disrupted the tendering process and the possible formation of Contract A.
In those circumstances, the CCJ said CARA had not accepted any offer embodied in the RFP and no Contract A arose.
Justice Rajnath-Lee further held that although receivers in Guyana are subject to a statutory duty to act honestly and in good faith, CARA had not pleaded or established any breach of such a duty in the conduct of the RFP process.
Cara had challenged the decision of the Court of Appeal, which dismissed its claim arising from a 1999 receivership sale of Hotel Tower Limited.
Mr Ram, acting as Receiver/Manager appointed by the Bank of Nova Scotia under a debenture, invited proposals for the purchase of the hotel’s assets.
Cara submitted a conditional proposal but was not awarded the sale.
The Appellant alleged breach of contract, unfair treatment, and misrepresentation.
The CCJ noted that the Guyana High Court and the Guyana Court of Appeal found no binding contractual relationship or obligation to consider Cara’s bid, given the RFP’s cancellation clause.
Before the Caribbean Court of Justice, Cara appealed the Court of Appeal’s order for dismissal, arguing that there were enforceable obligations to consider its proposal and that the Receiver’s conduct deprived it of a fair opportunity.
Cara sought a reversal of the Court of Appeal’s decision, damages for lost opportunity, and costs.
CCJ judge, Chile Eboe-Osuji, in his contribution to the unanimous judgement by the regional court which is Guyana’s final court of appeal, found that Cara’s had not submitted a compliant bid given rise to a contract A.
He said that was because Cara’s bid was expressly made subject to several conditions, including the completion of its due diligence process under an arrangement that was different from the arrangement indicated in the RFP, and before its bid could be considered for selection as the designated investor, as well as subject to the approval of its financial backers.
Additionally, the court found that Cara’s bid proposed an alteration to aspects of the timetable contemplated by the RFP. “Cara’s purpose in making its bid submission subject to these conditions was specifically to obviate its tender from being considered a binding contract upon its submission until it had waived the conditions,” the court added.
He said Cara never waived the conditions and so its bid did not at any time create a contract A between it and the receiver.
The CCJ said in those circumstances, CARA’s bid did not, in the ordinary principles of contract law, amount to an acceptance of an offer to contract embodied in the RFP, and therefore no process contract arose between the parties.
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