Govt sues contractor, insurance company for breach of contract
Construction of dormitories at LTI
The Government of Guyana has filed a multi-million-dollar lawsuit against Courtney Benn Contracting Services Limited for breach of contract over the construction of dormitories at the Linden Technical Institute which was set to cost $398,272,895.
In the lawsuit filed by Attorney General Anil Nandlall, SC, the Government is seeking over $100,000,000 from the construction company for general damages and aggravated damages respectively for breach of the contract dated July 3, 2017.
The Government is also seeking $39,827,289 as liquidated damages from Courtney Benn Contracting Services Limited as well as $119,481,869 being monies owed and payable by the company under the Performance Bond issued by Caricom General Insurance Company – the second-named respondent in the lawsuit.
Alternatively, it is asking for an order of restitution against Caricom General Insurance Company for all monies owing on the Performance Bond to the Government and for interest to be paid on all awards for damages in accordance with Section 12 of the Law Reform Miscellaneous Act.
The Government is also asking the High Court to grant such further or other orders as the court deems just and reasonable as well as costs. According to court documents, the Government of Guyana through the Education Ministry entered into a contract with Courtney Benn Contracting Services Limited for the construction of the dormitories of the Linden Technical Institute.
The contract price was fixed at $398,272,895. Nandlall said that the construction company was paid an advance payment of 15 per cent of the contract sum being $59,740,934. To date, he said the company has received $117,854,140 to execute the contract.
The construction of the dormitories was supervised at all material times by the civil works engineer attached to the Education Ministry and Courtney Benn Contracting Services Limited submitted a work programme to the Ministry’s engineer but failed to comply with it.
As a consequence, Nandlall submitted that the failure of Courtney Benn Contracting Services Limited to comply with the scheduled programme of works resulted in a breach of its obligations under the contract. In the circumstances, he stated that the Education Ministry caused the contract to be terminated on February 12, 2021.
Nandlall explained that the grounds for termination of the contract are as follows: failure to comply with the schedule of works and the inordinate delay in carrying out works which amounted to fundamental breaches of the agreement.
Given that the actions of the construction company have impacted the interest of the public in the non-completion of the construction of the dormitories at the Linden Technical Institute, Nandlall is asking the court to grant the orders in the lawsuit.
The Linden Technical Institute has been in existence for over 60 years. It provides a wide range of diploma and certificate courses in Computer Science, Administrative Principles and Practices, Commerce, Craft, Carpentry and Joinery, Electrical Installation, Radio Electronic Servicing, Mechanical Fitting and Metal Machining.
In January 2021, the Government instituted a lawsuit against Courtney Benn Contracting Services Limited and Caricom General Insurance company in which it is seeking in excess of $413 million in damages in relation to the breach of contract for the rehabilitation of the St Rose’s High School.
The Government has also taken BK International and the North American Fire and General Insurance Company (NAFICO) to court over breach of contract in the construction of the Yarrowkabra Secondary School. The Government is seeking over $717.8 million in damages.