DDL challenges GUYSUCO on molasses sales programme
By George Barclay
Guyana Chronicle
May 24, 2004
Demerara Distillers Ltd. (DDL) has applied for a writ of certiorari and prohibition to prevent the Guyana Sugar Corporation Ltd. (GUYSUCO) from implementing its decision to include a Trinidad and Tobago company (Angostura) in its extension molasses programme.
DDL has been granted an order nisi by Justice Dawn Gregory Barnes.
GUYSUCO in its affidavit in answer, is asking the Court to discharge that nisi order, and to dismiss the applicant’s notice of motion dated
March 18, 2004, with costs.
Since then, DDL has applied for leave to file an affidavit in reply to GUYSUCO’s affidavit in answer, and has been given two weeks within which to do so.
Among other things, DDL is alleging that it has a legitimate expectation of consultation before GUYSUC0 enters into any agreement with Angostura of Trinidad and Tobago, or any other legal entity which will have the effect of depriving DDL of a first call or option on molasses produced by GUYSUCO.
DDL is also saying that it has been induced to believe that DDL will have a first call or option on all molasses produced by GUYSUCO, and, that any agreement between GUYSUCO or any other legal entity which has the effect of depriving DDL of its first call or option to the limit of its annual requirements on all molasses produced by GUYSUCO is unlawful, unreasonable, contrary to the principles of natural justice, null and void and of no legal effect and is in breach of the legal rights and interests of DDL.
GUYSUCO’s affidavit in answer, which has also been filed in the Supreme Court Registry, had been sworn to by Mr. Michael Knight of GUYSUCO’s Ogle Estate, Ogle, East Coast Demerara. Knight is the Acting Chief Executive Officer of the Guyana Sugar Corporation, Inc., the respondent herein.
Mr. Knight also denied that the applicant (DDL) is entitled to a perpetual “first call” on all molasses produced by the respondent regardless of the circumstances and to the detriment of the respondent’s business as set out above.
He explained that the applicant, since the year 2000 and the demise of CMC, has been offered the option of purchasing molasses from the respondent before it is offered to any other purchaser merely because of the convenience of doing so, the applicant being located in Guyana. At the end of each year, the applicant and the respondent would engage in discussion leading to an agreement or agreements regarding the price and quantity of the annual production of molasses for the following year, which (quantity) the applicant would purchase.
GUYSUCO’s affidavit in answer went on to deny that the respondent is a monopoly as regards the production of molasses as a result of being the sole producer of sugar in Guyana.
It was pointed out also, that the respondent, too, has the only supply of molasses in Guyana only because it is the only sugar producer.
Mr. Knight said that he had been advised by the respondent’s attorneys-at-law, that the respondent does not fall within the definition of a monopoly, as understood by section 21 of the Civil Law Act, Chapter 6:01 of the Laws of Guyana, or at all.
The affidavit in answer, referring to paragraph 8 of the applicant’s affidavit, denied an averment by the applicant that the Government of Guyana controls and directs the respondent.
Knight’s affidavit explained, “While the Government of Guyana exercises the rights and duties of a shareholder it does so through the Board of Directors of the respondent on which the main Opposition Party is normally represented. The Government of Guyana does not impose the control and direction as implied by the applicant (DDL).”
It was also denied that the applicant (DDL) is entitled to a claim that it has a legitimate expectation as the relationship between the applicant and the respondent has at all times been a commercial relationship, based on oral or written agreements. Contract and commercial law relationships are not subject to judicial review, the document disclosed.
Further, the applicant has been given written assurances that DDL will continue to receive molasses at the current rate of supply, barring unforeseen circumstances, Knight said in his affidavit in answer.
According to the said affidavit, the Court has been asked to vacate the order nisi made on March 8, 2004, and to dismiss the applicant’s notice of motion dated March 18, 2004, with costs.
On the other hand, Managing Director of Demerara Distillers Ltd., Mr. Komal Samaroo, who swore to the affidavit in support of DDL’s motion, is urging the Court to grant the orders prayed for.
Among other things, the DDL is asking are:-
(a) That an order or rule nisi of certiorari be issued to the Guyana Sugar Corporation Ltd. by this Honourable Court to quash the decisions made by GUYSUCO firstly, to offer for public tender preferred access to its Berbice molasses production; secondly, by purporting to enter into a memorandum of understanding (MOU) with Angostura Limited, a Trinidad and Tobago company on or about August 18, 2003, for the sale by GUYSUCO to Angostura of all the molasses manufactured by GUYSUCO in Berbice on the grounds that the said decisions were made arbitrarily, were unreasonable, unfair and are contrary to the expectation created in favour of the applicant of having a first call on molasses by GUYSUCO, the obligations owed by GUYSUCO as a monopoly to the applicant, and in breach of the rules of natural justice, and are null, void and of no legal effect.
(b) That an order or rule nisi of prohibition be issued to the Guyana Sugar Corporation Ltd., from further proceeding with, negotiating, concluding, entering into, or bringing into force any contract with any person or company other than the applicant in respect of the commitment or sale or supply of molasses manufactured by GUYSUCO without first offering the same to the applicant.
Senior Counsel Messrs Rex McKay, Miles Fitzpatrick and Edward Luckhoo are appearing for the applicant, while Senior Counsel Messrs Joseph Arthur King, Hari Narayen Ramkarran, Ms Josephine Whitehead, Mr. Rafiq Khan, Nikhil Ramkarran, Kamal Ramkarran and Shobna Persaud are representing the respondent (GUYSUCO).
When the case is called within the next two weeks, DDL is expected to forward its affidavit in reply to the Court.