Arbitrator rules in favour of Hand-in-Hand; R. Sookraj awarded $30.79M
Stabroek News
July 7, 2002
Arbitrator Oslen Small, has ruled in favour of the Hand-in-Hand Insurance Company, awarding the sum of $30.79 million to R Sookraj and Sons for loss of property in post-2001 election violence by fire.
R Sookraj and Sons had opted to go to arbitration 13 months ago after it made a claim for $37 million plus interest at 10.95%, but was offered $30.79 million by the firm. The fire took place on April 9, 2001 and gutted several buildings in Regent and Robb Street in the same block including the Kissoon's Furniture City.
The retired judge, after his deliberations, awarded the exact sum quoted by Hand-in-Hand to the firm as full and final settlement of the claim. Alston Sookraj said on Thursday that his father's company was surprised by the judge's decision, but the arbitration ruling was binding on both sides.
An advertisement in last Sunday's Stabroek by the insurance company announced the arbitration award which saw $100,000 in cost being awarded to Hand-in-Hand.
The company's claim was that it had valued its premises at $37 million, a value endorsed and on which premium was paid without any objection by Hand-in-Hand.
However, he said that the loss adjuster, Gregory Yeadon of GM Yeadon Group Inc of Barbados applied depreciation of $10 million on the cost of the building, which Sookraj said, should have never been given any treatment. He insisted that in an inflationary economy like Guyana, depreciation could not be applied and said he has expert accounting advice on this.
Sookraj said that the retired judge took this $10 million depreciation into account in not increasing the amount to be paid out by Hand-in-Hand. He said that Small dismissed the pricing variance of $3.4 million being sought by the insurance company and allowed for the over $3 million in G.H. racks to be considered part of the building, along with two glass panels and two storage bonds.
However, Small did not entertain Sookraj's application for a two per cent contractor's professional fee in the award.
The younger Sookraj said it was not just a case for money, but precedence was being set with the depreciation being allowed that would haunt the country's insurance sector.
He indicated that the sum of $30.7 million had been forwarded to the company's bank account and apart from settling some outstanding credit, the company would be sending most of the money abroad as the economic environment was not conducive to investing further money locally.
Hand-in-Hand had earlier paid $15 million to the firm for loss of stock destroyed in the same fire, making the total claim settlement $45.79 million.