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Storage tanks at the Petrotrin refinery.

Curtis Williams

Lead Editor Business

[email protected]

With State-owned Petrotrin having not taken the advice of its attorneys to urgently file an action in the High Court to defend itself against A&V Oil and Gas, comes the revelation that the company has already spent more than $5.5 million in legal fees in both the arbitration and on the very advice it has so far not accepted.

The company has been represented by Deborah Peake S.C, Ravi Haffes-Doon, Tamara Toolsie and Marcelle Ferdinand and in response to a Freedom of Information request, Petrotrin said it has so far paid Peake $1,946,250.00, Heffes-Doon $1,634,999.99, Ferdinand $1,494,014.02 (including disbursements) and Toolsie $450,000.00 for a grand total of $5,535,834.01.

Petrotrin, which sent home all its workers in 2018 after it went bust and was replaced by Heritage Petroleum, is at risk of having to pay A&V hundreds of millions of dollars after it lost the arbitration against the south-based company in what is popularly called the fake oil scandal.

In its response, Petrotrin said the arbitration is still ongoing and admitted it has received legal advice that it should go to the High Court to defend its interest.

The response stated:

“1. The legal team comprising Mrs. Deborah Peake S.C. and Mr. Ravi Heffes-Doon advised Petrotrin to make a counter-claim against A&V Oil and Gas Limited (“A&V”) in the arbitration commenced by A&V.

2. The legal team comprising Mrs. Deborah Peake S.C and Mr. Ravi Heffes-Doon advised Petrotrin that it had a viable defence to the arbitration commenced by A&V.

3. No document exists regarding the legal advice dealing with the merits of Petrotrin’s arbitration case.

4. Petrotrin is unable to provide copies of the witness statements together with exhibits filed on behalf of both parties in the arbitration at this time as:

(i) the arbitration is not at an end and premature disclosure of same will be reasonably likely to prejudice the fair hearing and impartial adjudication of the proceedings, pursuant to section 28(1)(b) of the FOIA;

(ii) all the witness statements were prepared and communicated in confidence for the purpose of the arbitration, and disclosure at a time when the arbitration is not yet at an end may be reasonably likely to impair Petrotrin’s ability to obtain the cooperation of witnesses and similar information in the future, including for the continuation of the proceedings, pursuant to section 32 (1) of the FOIA; and

(iii) in the foregoing circumstances, granting access at this time to the requested witness statements is not justified in the public interest having regard both to any benefit and to any damage which may arise from disclosure.”

With more than a month having passed since the company received the advice to file an urgent action in the High Court, its chairman Michael Quamina recently confirmed that no action has been filed against A&V Oil and Gas and insisted that the company’s attorneys are still “looking into the matter.”

He said, “At present, it is with all of the lawyers, that is all I can tell you.”

Asked when is a decision to be made he said, “I have no further comment Curtis…You know all of these things are very sensitive, you have lawyers involved, they having their special talks so I can’t say anything more than that.”

Told this was a public interest matter and the country had the right to know what is happening Quamina said, “I don’t know how that conflicts with what I am saying. If I have nothing to say Curtis, I can’t say something because there is public interest. I am not being difficult but I am being honest.”

Told that all litigation must come to an end he said, “I am not saying it is going to continue ad-infinitum either, but the fact about it is, as you say this is a matter of significant public interest and the point about it is that it is being dealt with very, very appropriately and comprehensively.”

In a confidential 18-page opinion done for Petrotrin on the outcome of a recent arbitration between itself and A&V, Peake argued that the arbitral panel involved in the matter made fundamental errors in coming to their conclusion and that the state-owned company had a good chance of success if it went to the High Court for relief.

The opinion reads: “In the premises, we are of the respectful view that the award discloses gross and fundamental errors on the face of the award and the arbitrators are guilty of misconduct in the conduct of the proceedings. The findings on the principal issues are irrational and unsupported by the evidence. For the foregoing reasons, we are of the view that the prospects of setting aside the award are good.”

The A&V Oil and Gas issue first came to light when Opposition Leader Kamla Persad-Bissessar read on a political platform a report that alleged A&V Oil and Gas, which is owned by Nazim Baksh, a man Prime Minister Dr Keith Rowley describes as his friend, was charging Petrotrin for oil his company did not actually produce.

Petrotrin would subsequently investigate the issue and discontinue its contract with A&V drilling for crude from the Catshill field in Rio Claro.

Peake, who represented Petrotrin in the arbitration, argued that unless moves are made now to stop the arbitration, the company could find itself paying out significant sums.

“Unless the award is set aside, there is a high probability that in any further hearing on the issue of the quantum of damages to which the tribunal has decided that A&V is entitled, the tribunal will award substantial damages, particularly since it has decided (remarkably having regard to the evidence) that all A&V’s witnesses are credible.”

A&V has asked the tribunal that it be awarded US$119,409,000 or the equivalent of $808,398,930. This does not include issues of cost and other money which Petrotrin is said to be holding in escrow for oil under dispute.

However, Peake argued that the arbitral panel, which comprised Sir Dennis Byron, Lord David Hope and CVH Stollmeyer, made several errors during the matter, including placing an erroneous burden of proof on Petrotrin that there were reasonable grounds for suspicion that A&V was misrepresenting the amount of oil produced and sold to the State company and the panel also had the wrong standard of proof.

She insisted that the ruling placed Petrotrin and its successor company Heritage at serious financial risk and the possibility of other companies taking advantage of it.

The arbitral panel is yet to make a decision on the final quantum it will award A&V drilling as a result of the termination of its contract by Petrotrin, but Peake noted that on Tuesday, A&V had already made an application for a $75 million part payment of the money that would be owed to it due to the award.