Precision inspects records of Republic Bank

-in case of alleged breach of contract

Precision Woodworking Ltd on Thursday inspected records of Republic Bank (Guyana) Limited pursuant to its suit against the financial institution for alleged breach of contract.

The bank had filed an appeal against the inspection order, arguing that it was unaware that Precision Woodworking even made such a request to the court.

Republic Bank is contending that it received no notice that an application for such an order was being made and was denied an opportunity to make important submissions.

Precision, however, argued in court  that an appeal does not operate to stay any order of the High Court of the Supreme Court of Judicature.

It noted further, that all orders of court remain valid and subsisting unless and until they are set aside by a court of competent jurisdiction.

Precision pointed out too, that noncompliance could expose the bank to considerable liability for acting in contempt of a clear valid and subsisting order of court.

The inspection was carried out at the bank’s Waterloo and New Market streets Head Office on Thursday morning.

The order was granted by High Court Judge, Justice Navindra Singh on January 5, 2018.

In its statement of claim to the breach of contract suit, Precision Company (the plaintiff) had said that owing to difficulties by which it was overcome, it was invited to, and attended a meeting convened by the bank on June 30, 2011.

According to the plaintiff, prior to the meeting it had borrowed from the bank and had repaid principal in full of about $513,000,000 and had paid interest in excess of $327,000,000 and was always considered by the institution as an “excellent customer.”

At the date of that meeting, Precision claimed that it was not in arrears.

At that said meeting, the plaintiff said its indebtedness was principal $406,553,074 and interest $10,613,224 regarding an agreement of sale with Torginol Paints Incorporated for lots 21 and 32 of the property in transport No. 490/2008 for the sum of $230 000,000.

Precision said that before the meeting, its directors had informed the bank of their efforts to find a purchaser for part of that property, to which the bank had no objections.

Its statement of claim details that it thereafter accepted $30,000,000 from Torginol Paints as a deposit on the sale which was then handed over to, and encashed by the bank.

According to Precision, it was only after the said cheque was handed over, that Kashir Khan (the first-named defendant), in his capacity as receiver for Precision, was introduced to its directors by the bank, as having been appointed receiver of the company under the existing debentures.

In its statement of claim, Precision advanced as unlawful, among other things, the bank’s appointment of Khan as receiver of the woodworking limited.

The plaintiff has also argued that the receiver failed to act honestly and in good faith in dealing with its property “in a commercially reasonably manner;” adding that its assets were unlawfully disposed of.

It says it has suffered loss and damage as a result of the actions of the defendants.

It has also advanced, that the bank, breached the provisions of the Financial Institutions Act by attributing interest to the plaintiff company’s outstanding indebtedness, when they were not permitted to do so.

The plaintiffs are seeking a declaration that the appointment of Khan as receiver for Precision Woodworking Limited was unlawful, null, void and ultra vires to the Companies Act 1991.

It also seeks a declaration that the receiver did not act in its best interest, given his role as agent of its company; nor did he exercise reasonable care in his dealings with its assets.

A declaration is also being sought that the receiver has not acted and or conducted himself as the appointed receiver of Precision in accordance with the Companies Act 1991.

Apart from Precision, the other plaintiffs are listed as Ronald Bulkan and Rustum Bulkan who are represented by attorney Nigel Hughes.

The defendants, meanwhile, are being represented by Senior Counsel Robin Stoby and Tariq Khan.

February 7 and 8, 2018 have been set for trial before Justice Singh.

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