Booker Tate sues GuySuCo for Skeldon management fees

In the fallout over the defects-plagued Skeldon sugar factory, the UK-based sugar management firm Booker Tate filed a lawsuit against the Guyana Sugar Corporation (GuySuCo) three months ago claiming millions for services rendered.

Booker Tate took legal action in September through its attorney Nigel Hughes but the lawsuit was kept quiet until GuySuCo’s Chairman Dr. Nanda Kishore Gopaul made mention of it earlier this week at a press conference. Gopaul had announced that government intends to file a counter claim.

Nanda Kishore Gopaul

Gopaul said that Booker Tate had supervised the Skeldon project in its start-up phase and as a result there were design flaws. He blamed the firm for the ongoing problems at the factory, saying that Booker Tate was “incompetent” and had mismanaged the project. He added that Booker Tate also failed to address the concerns of the Chinese contracting firm, CNTIC.

Booker Tate has for its part accused GuySuCo of prematurely terminating agreements which were entered into, including a project management service contract for the Skeldon Sugar Modernisation Project. The firm also claims that the corporation has refused to pay for services rendered.

Booker Tate filed two claims; one over the Skeldon project and another for corporate management services it provided to the sugar corporation for an agreed period, and according to the firm it is owed in excess of £4M.

In the first statement of claim, Booker Tate said that it entered into an agreement in March 2004 with the corporation for corporate management services which would continue until December 31, 2005, but in accordance with the agreement it was expected to continue for six months after the formal takeover and integration of the new Skeldon factory.

Booker Tate said that the services were provided, but the corporation failed to pay the £224,349 which was agreed on.

But on August 5, 2009, Booker Tate and the corporation agreed to terminate the first agreement for the provision of corporate services and replace that with a technical services agreement.

Court documents indicate that on the same day (05/08/2009) the corporation and Booker Tate agreed to release GuySuCo from all its obligations under the corporate management agreement with effect from April 1, 2009 and that the corporation would honour its indebtedness to the firm. According to the firm, repeated requests have been made for the sum to be paid and a lawyer’s letter was sent on February 25, 2010, but no monies have been forthcoming.

For the second court claim, Booker Tate said that it entered into an agreement with the corporation in August 2004, to provide project management services in respect of the implementation phase of the Skeldon project. The firm said that as agreed, the corporation said it would pay £2.4M as a fixed project management fee, reimbursable expenses and costs estimated in the sum of £834,056, and payments for the provision of additional services at rates and prices to be agreed.

Booker Tate noted that Clause 38 (1) of the project management agreement obliged the corporation to effect payment promptly and no later than 30 days from the receipt of written invoice served on the corporation.  Whereas, Clause 38 (2) said that if the corporation did not make the payment within the stipulated time a further sum in agreed compensation at the rate of 2 percent points        per annum above the London Interbank Offered Rate (LIBOR) compounded monthly on the overdue sum and its currency reckoned from the date for the payment of the invoice was to be paid.

Booker Tate stated that the services were provided as agreed and GuySuCo was issued with 29 invoices for the period 27/01/09 to 28/02/10 in the sum of £345,589. However, the corporation made no payments to the firm.

By a notice dated December 23, 2009, GuySuCo informed Booker Tate of its intention to invoke the provisions of Clause 38 (2) of the project management agreement. Further, the corporation issued a notice of intention to terminate the said agreement within 14 days. GuySuCo later terminated the agreement by an email, dated February 22, 2010, informing Booker Tate that the services of the engineer were no longer needed. According to the firm, this notice was in breach of the agreement. Subsequently, Hughes wrote the corporation on February 25, 2010, saying that the termination was in violation of the terms of the agreement, and that the firm was rejecting the termination. In March 2010, Booker Tate said it handed over to the corporation a full and comprehensive Hand Over Report of the project management services agreement as well as repeated its demand for payment of the sum of £345,589.

According to the firm, interest on the invoices which were issued continues to accumulate at the rate mentioned.

Further, as it relates to the technical services agreement, Booker Tate said that the services were provided for the Skeldon project; the duration of the contract was from April 1, 2009 to September 30, 2010.

The term of the agreement stated that the corporation would pay Booker Tate a technical support service fee of £85,000 pounds per annum from the commencement date of the agreement.

Booker Tate served the corporation with a notice of default under the agreement on December 23, 2009, which GuySuCo ignored, and in February the firm sent the corporation a lawyer’s letter demanding payment.  In March, the firm served the corporation with a notice to terminate the agreement.

Booker Tate said that it is owed £94,811 pounds on the technical service agreement contract in addition to £345,589 pounds on the project management agreement.

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