AN arbitration award against the state through the Ministry of Agriculture (MOA) totaling $179M to Falcon Transportation and Construction Services (Applicant) owned by Azad Meerza of Meten-Meer-Zorg was on April 20, 2018, set aside by high court judge, Navindra Singh.

Justice Singh ruled that the arbitration award made in 2017 was improperly procured, having been determined by an improperly formed or appointed arbitration in contravention of the Arbitration Act Chapter 7:03 of the Laws of Guyana.

Meerza, under his trading name, Falcon Transportation and Construction Services, had entered into a contract in 2009 with the MOA (Respondent) to perform construction works stipulated. The contract provided for the settlement of disputes by an adjudicator and stated that in the event the adjudicator’s decision was not accepted by both parties to the contract, then the dispute ought to be settled by arbitration.

In 2011, a dispute arose between the parties and the adjudication process was employed, but the MOA did not accept the decision of the adjudicator. As a result, the parties agreed to have the dispute settled by arbitration and an arbitration tribunal was appointed on March 28, 2013 by agreement. That tribunal which consisted of chairman, George Howard and members Paul Sarran and Clairmont Marshall, proceeded to examine evidence, but before a decision was made, Howard resigned on October 10, 2014.

After his resignation, Falcon Transportation objected to Sarran being a member of the tribunal and on November 25, 2014, Marshall appointed Edward Gonsalves as a member of the tribunal; MOA did not nominate a replacement. Marshall and Gonsalves proceeded to adjudicate on the claim without further participation from MOA and awarded the applicant the sum of $176, 285, 299 .55. As a result, Falcon approached the high court seeking leave of the court to enforce the award as a judgment pursuant to section 13 of the Arbitration Act.

That application was refused by Justice Franklyn Holder who found that the arbitration panel was not properly constituted at the time of making the award.

Falcon Transportation then instituted high court action seeking an order of the high court pursuant to Section 6 of the Arbitration Act to appoint an arbitrator for the respondents to constitute the full complement of three arbitrators as agreed by the applicant and

respondents, which consisted of Marshall and Gonsalves, to consider disputes arising out of a contract executed on August 6, 2009, between Falcon Transportation and the MOA, pursuant to the Agricultural Export Diversification Programme.

Despite the specificity of the relief sought on April 12, 2016, Justice Rishi Persaud had ordered the applicant and respondents to nominate an arbitrator of their choice and that the arbitrators present themselves on April 22, 2016 with a view to nominate a third arbitrator or court appointed arbitrator.

The said day Falcon Transportation presented Edward Gonsalves and after further hearings, the court appointed Leon Rutherford as the second arbitrator in default of the respondent presenting a nominee.

Gonsalves and Rutherford then met and appointed Maurice Veecock as the third arbitrator and chairman of the board of arbitrators and that tribunal proceeded to consider the claims of the applicant and awarded the sum of $179, 946, 850 in February 2017. Thereafter, the applicant applied to the court for leave to enforce the award as a judgment.

MOA, represented by Collene Liverpool and Utieka John of the Attorney General’s Chambers, argued that Gonsalves having served on the previous arbitration tribunal which made an award against the respondent, could not properly be considered to be independent and impartial.

The attorneys asked the court to set aside the award under section 12 of the Arbitration Act Chapter 7:03. In considering the facts of the case, Justice Singh noted that Justice Holder having ruled that the arbitration tribunal constituting Marshall and Gonsalves was improperly constituted, by extension invalidated the award made by the tribunal. He noted that in keeping with the contract, the parties to the contract were required to sit and determine whether they were going to again attempt to have the disputes settled by arbitration and in those circumstances proceed to or at least attempt to appoint another Arbitration Tribunal.

“However, instead of doing that the Applicant made an illogical and ill-advised application to have the court appoint a third arbitrator to an arbitration tribunal that had already handed down its decision. That application could not legally have been granted for the obvious reason that that Arbitration Tribunal tenure had come to an end. They ought to have been dismissed,” Justice Singh stated.

The high court judge said too that despite the aforementioned, the court continued to entertain the action, as an application to appoint a new arbitration tribunal, despite the fact that there was no such application made in the action nor any evidence that the parties consented in any manner or form to designate the court the appointing authority to appoint an arbitration tribunal. There was no order of the court specifically appointing Edward Gonsalves as an arbitrator. The judge noted that neither the MOA nor the respondent (State) participated in that process.

“It is noted that the rubric of this action embodies an application for appointment of an arbitrator. In these circumstances, the court finds that the arbitration tribunal that made the award was improperly convened and therefore any award by that tribunal is consequently invalid,” Justice Singh ruled. Falcon Transportation and Construction Services was represented by Gary Ramlochan.