APNU/AFC Panama rice deal: GRDB ordered to pay US$308,000 to Golden Fleece Rice Investment for rice supplied

High Court Judge Gino Persaud

For rice it supplied to the Guyana Rice Development Board (GRDB) for export to Panama for which it was never paid, Golden Fleece Rice Investment has been awarded a judgement by High Court Judge, Gino Persaud, in the sum of US$308,620.03, together with GY$1 million in costs.
Last year, Nazeemul Hakh and Shareeda Hakh of Golden Fleece Rice Investment had moved to the High Court seeking judgement on the sum owed to them.
In their Fixed Date Application (FDA), the duo had deposed that the monies are owed to them for the supply of long-grain white rice pursuant to two contracts to the GRDB. The rice, according to them, was supplied between August 1, 2018, and November 7, 2018.
The GRDB had, however, contended that because it had not received payment from the buyer in Panama, it could not have paid the supplier. But the millers contended that the failure of the GRDB to pay them is unduly long and unreasonable and that they are not convinced sincere and strident efforts were made to obtain payment from the buyer.

Rice being prepared for exportation

In his ruling, Justice Persaud ordered that the GRDB must pay US$308,620.03 or its equivalent in Guyana dollars at the prevailing Cambio rate of exchange at any commercial bank at the date of payment together with statutory interest on that sum, together with GY$1M in costs.

Vilvoorden Investment Inc
In a similar case filed against the GRDB, rice farmer and miller, Vilvoorden Investment Inc was awarded judgement in the sum of US$77,000.20 for rice it supplied to the GRDB for exportation to Agriculture Marketing Institute, a state agency of Panama, but for which it was not paid.
Justice Persaud, in deliberating in this matter, observed that the payment contract between Guyana and Panama contains the following clause: “The buyer will pay the seller the value for the white rice…after deductions, as stated, are made by the buyer on receipt of payment from Panama”. The Judge held that the language of the clause does not suggest that payment is contingent on the GRDB being paid by Panama, but rather suggests a pay-when-paid clause.
However, the language used in the clause is ambiguous, and does not specifically refer to the entity in Panama from which payment would be made, Justice Persaud said.
According to him, further confusion is added by the latter part of the clause which states: “Invoices for each weekly shipment are to be submitted to the [GRDB]. Payment will not be made if the seller does not submit the invoices to the Guyana Rice Development Board.”
The High Court Judge reasoned that the aforementioned clause suggests that payment would be made after invoices are supplied by the subcontractor [Vilvoorden Investment] on a weekly basis, and that if these invoices were not supplied, the subcontractor could not be paid.
Having regard to this, he held that GRDB cannot rely on the pay-when-paid clause, since that clause is unspecific and ambiguous. Importantly, he went on to note that Vilvoorden Investment had completed its obligation under the contract four years ago, and thus was entitled to be paid within a reasonable time for the rice supplied.
“The pay-when-paid clause did not absolve [GRDB’s] liability to pay [Vilvoorden Investment] even if it had not been paid,” Justice Persaud pointed out. By relying on that clause, he said, the GRDB had to advance all means possible to obtain payment from Panama; but from the evidence provided, it had not so done. In this regard, the Judge held that “merely sending letters to demand payment is not sufficient, given that four years have passed.”
Based on his findings, Justice Persaud granted judgement in favour of Vilvoorden Investment in the sum of US$77,000.20, or its equivalent in Guyana dollars, with interest on that sum, together with costs in the sum of $1 million to be paid in six weeks.
The Judge, in his decision, noted that the circumstances surrounding this case have thrown up a “Heller’s Catch-22 situation.”
The Guyana Government is still actively trying to recover the more-than one billion dollars owed by the Government of Panama over a flawed rice deal that was struck under the A Partnership for National Unity/Alliance For Change (APNU/AFC) Government in 2018. In March, Attorney General and Legal Affairs Minister Anil Nandlall, SC, had revealed that legal proceedings have been filed at the International Chamber of Arbitration in France in an attempt to recover the money owed to local rice farmers and millers.
On April 13, 2018, a contract was signed between the Government of Panama and the then APNU/AFC Administration for the supply of some 9000 tonnes of rice, with the GRDB being the facilitator. Reports indicate that after the rice was shipped, a partial payment was made, but the balance, which has now accumulated significant interest, remains outstanding to date.
There was another contract signed in 2019, for which no payment was made to Guyana, Agriculture Minister Zulfikar Mustapha had told the State-owned Guyana Chronicle.