GRDB granted leave to appeal almost $100M award to rice miller

The Guyana Rice Development Board (GRDB) has been granted its request by the Court of Appeal to challenge a Full Court ruling awarding rice miller Arnold Sankar almost $100 million for unpaid paddy supplied to it.

During a hearing yesterday morning, Justice of Appeal Dawn Gregory said that having considered the motion brought by the Rice Board, the court was of the view that the potential appeal has merit.

Having been granted leave to appeal, the GRDB was ordered to file its notice of appeal within seven days.

Meanwhile, attorney Timothy Jonas, who is representing the GRDB, has said that he will be taking steps to formally apply to the appellate court for a stay of execution on the judgment granted to Sankar by the court below.

In a bid to enforce that judgment, Sankar, through his agents on Wednesday, executed a levy on assets of the GRDB.

Successful in its motion to the Court of Appeal for permission to appeal, the Rice Board has been granted cost in the sum of $100,000, which has to be borne by Sankar.

The rice miller’s attorney, Rajendra Jaigobin, is peeved at the GRDB being granted permission to appeal the judgment awarded to his client by the Full Court, while noting that it amounts to abuse of process.

Detailing a timeline of the progression of the matter, Jaigobin said that pursuant to Section 6 of the Court of Appeal Act, the GRDB required permission to appeal the decision of the Full Court, from which there existed no right of appeal.

He said that while the Rice Board was required to seek permission within 14 days of the April 23rd, 2018 ruling of the Full Court, on May 14th—outside of the statutory 14 days period— it filed a summons before a single judge of Court of Appeal seeking permission to appeal. 

Realising at the hearing of that summons that it had incorrectly filed “the wrong application to the wrong court,” counsel said that the GRDB was then granted permission to withdraw the summons. 

On July 19th, 72 days after the expiration of the standard 14-day filing period, counsel said that GRDB filed a notice of motion in the Court of Appeal seeking an extension of time to seek permission to appeal. 

He said that this notice of motion was, however, dismissed for want of prosecution on October 29th, after GRDB failed to appear in Court. 

Notwithstanding the dismissal, Jaigobin said that on October on 30th, the GRDB filed yet another notice of motion before the Court of Appeal, in which it sough an extension of time to seek permission to appeal.

Jaigobin expressed shock that though the motion was 5 and 1/2 months out of time—and the Rice Board’s third attempt at seeking permission to appeal—it had nonetheless been granted permission.

Jaigobin’s contention is that this amounts to an abuse of the process of the court.

In April, at the conclusion of a Full Court hearing, Justices Jo-Ann Barlow and Simone Morris-Ramlall awarded Sankar the full sum of $99,670,273, which he said lost as a result of the Rice Board’s breach of the paddy-supply deal.

Having received no payments and left with no alternatives to enforce the judgment, however, Sankar, through his agents, on Wednesday executed a levy on assets belonging to the Rice Board, in which two vehicles were seized.

The Essequibo rice miller’s agent, who is attached to the Chambers of attorney Anil Nandlall and who spoke on condition of anonymity, had told this newspaper that while they were only able to seize two vehicles, they intend to return some other time to levy on other assets once payment is not forthcoming.

In addition to $99,670,273, Justices Barlow and Morris-Ramlall also ordered the GRDB to pay over to Sankar interest at a rate of 6% per annum from November 7th, 2016 when he filed his court action, to the date of judgment, which was passed on April 23rd of this year.

The Rice Board also has to pay interest at a rate of 4% per annum from the date of judgment until the amount has been paid in full.

Apart from these sums, Sankar was also granted $249,963 in High Court costs he was seeking, in addition to securing $50,000 in costs from the Full Court.

The rice miller, of the Arnold Sankar and Sons Rice Mill, of Airy Hall Essequibo Coast, had moved to the courts over a 2015 paddy deal, which went sour after he ordered paddy he said the Rice Board requested but for which it never paid.

In his lawsuit, Sankar had said that during the first rice crop of 2015, the GRDB requested that his company purchase as much paddy as was available on the market, at a price of between $3,000 and $3,300 per bag.

He said the GRDB gave an undertaking to purchase all of the paddy from Arnold Sankar and Sons, at a cost of US$490 per metric tonne, for which he said a $60 million advanced payment was paid to his company as part performance under their agreement.

After receiving the cash, Sankar said that he paid by cheque to some of his suppliers. He said that this payment was done in the presence of then GRDB General Manager Jagnarine Singh, accountant Peter Ramcharran and Deputy General Manager Madanlall Ramraj.

He, however, said that the advance sum paid by the defendant was inadequate to pay for all the paddy purchased and that the named representatives of the GRDB knew this but still desired the delivery of all the paddy purchased.

Sankar had deposed that the GRDB representatives requested that his company fully pay the remainder of the farmers and thereafter promised to repay Arnold Sankar and Sons Rice Mill from the proceeds to be received from the sale of the said paddy by the GRDB.

Relying on this promise made by the GRDB, Sankar said that his company then went ahead and purchased a total of 32,622 bags of paddy, equivalent to 2,121 metric tonnes, at a cost of $90,749,215.

Again relying on the guarantee made by the GRDB under the agreement, Sankar had stated in his affidavit that he applied for, and obtained overdraft facilities from the Guyana Bank for Trade and Industry, therefrom paying the unpaid farmers the balance of $30,749,215.

He further asserted that the GRDB then breached the agreement when on May 5th of 2015, it accepted delivery of only 813 metric tonnes of paddy, valued at $21,447,467, thereby leaving a balance of 1,308 metric tonnes of paddy.

The rice miller said that as a result, he was forced to sell the remaining paddy which by then was on the verge of spoiling, at US$225 per metric tonne—far lower than the US$490 per metric tonne to which the GRDB had committed.

In the circumstances, Sankar sued the Rice Board for $99,670,273, which he says his company suffered in losses and damage because of GRDB’s breach.

This figure comprises $131.3 million, the value of the remaining paddy had it been accepted by the GRDB, less the $58.5m received from C-Rice Inc to which it was sold, added to $25.1 million expended for the storage of the paddy plus $1.6 million in interest paid to GBTI for use of its overdraft facility.

Sankar’s legal team is headed by Nandlall, in association with Jaigobing and attorney Manoj Narayan.