Renward Loi Firm To Appeal $727m Claim


Renward Wells


Tribune Business Editor


The company at the centre of the Renward Wells Letter of Intent (LOI) controversy last night revealed its plans to appeal the Supreme Court’s dismissal of its $727.364m damages claim.

Stellar Energy, in a statement sent to Tribune Business by its new attorneys, suggested it was determined not to let the now-Cabinet minister, two government “agents” and the former Christie administration off the hook for dashing its proposed $600-$650m waste-to-energy plant solution at the New Providence landfill.

Emphasising its determination “to shed light on all that has transpired” so Bahamians can assess the former government’s conduct over the affair, Stellar Energy argued that its actions had been inconsistent with “best business practices” and threaten to undermine investor confidence if all the facts became known.

Describing the controversy as being “of crucial public importance”, Stellar Energy and its affiliate, Stellar Waste-to-Energy (Bahamas), rejected the Supreme Court’s dismissal of its claim and insisted that the LOI “be given its legal contractual effect” because all involved were acting with government authority.

Tribune Business revealed last month how Carol Misiewicz, the Supreme Court’s deputy registrar, found that Stellar Energy and its affiliates were “from any angle unable to sustain an action” against Mr Wells and his government “agent” co-defendants, Algernon Allen and Frank Forbes, “on the basis of the LOI”.

She determined that the LOI, the signing of which forced Mr Wells’ departure as Ministry of Works parliamentary secretary under the former Christie administration, “was not binding in law” and represented “a discussion document” rather than a completed contract.

The deputy registrar also branded Stellar’s claims against Mr Allen, himself a former Cabinet minister, and Mr Forbes, a businessman and accountant who ran Sigma Holdings, as “bad” given that they were not parties to the now-notorious LOI.

Ruling that Stellar had “not been able to overcome the hurdles presented by the LOI”, Ms Misiewicz said Mr Wells - despite signing it - was not a party to its terms.

“In any event the LOI, for whatever it was worth, automatically expired one year from the date of its execution, which was on July 3, 2015,” the deputy registrar found. “It was a discussion document, subject to contract and was not binding in law. Approached from any angle, the plaintiffs [Stellar] are unable to sustain an action on the basis of the LOI.”

Turning to Stellar’s claim against Messrs Allen and Forbes, Ms Misiewicz agreed with their attorney, Damien Gomez QC, that the allegations against the duo were “contradictory” and they were also not parties to the LOI. “I am satisfied that [Stellar] does not gave a good arguable case against any of the defendants, but in particular does not have a case against” them,” she said.

But, seemingly undeterred, Stellar Energy last night said it had hired new attorneys, in the shape of Osman Johnson and the Freeport-based Ayse Rengin Dengizer Johnson & Co law firm, to challenge the Supreme Court’s verdict before the Court of Appeal.

It pledged to file affidavits “which outline very serious and fully documented allegations against the past PLP administration”, although appeal courts are typically reluctant to interfere with factual findings by trial judges, instead dealing mostly with challenges relating to the law’s interpretation.

Stellar, adding that its case against Mr Wells, and Messrs Allen and Forbes, “strikes at the very heart of the principle of the responsibility of state actors”, said: “The [Stellar] board maintains that all parties concerned were acting under the actual authority of the Bahamas government at the material time that they executed the document and the Letter of Intent, irrespective of the opinions expressed by the honourable deputy registrar in her ruling, must therefore be given its legal contractual effect.”

The company said it had been negotiating its waste-to-energy plant proposal since November 2012, with Mr Wells ultimately signing an LOI that it “maintains is a valid legal contract which is enforceable in law”.

It described the resulting “leak” of the LOI, and subsequent controversy, as “contrived” to enable the former Christie administration to escape from the deal and not honour its terms.

“The fact is that the actions of The Bahamas government in the present matter simply do not represent best business practices, and neither do they encourage any confidence amongst prospective investors in The Bahamas,” Stellar’s statement said.

“These investors may find themselves in a similar position to Stellar Energy Ltd, having expended huge sums of capital in reliance upon what under normal circumstances should be considered to be a contract with a national government and one that will be honoured.......

“This is a matter of general public importance, and there is an obligation therefore to provide detail and shed light on all that has transpired here to the public so that they can make informed decisions as to the conduct of their government and its representatives.”

Jean Paul Michelsen, Stellar Energy’s Bahamas-based former chief operating officer, previously told Tribune Business he thought there would likely be little appetite to continue the case by appealing the deputy registrar’s ruling.

However, he indicated there had been a split with Stellar’s principal, Dr Fabrizio Zanaboni, who is likely to be the driving force behind the desire to continue the legal fight.

Stellar Energy launched its lawsuit in September/October 2016, claiming $727.364m in damages for loss of opportunity/profits, and seeking declarations that the Government both “honour” the LOI contract and not award a waste-to-energy contract to any other company until damages are paid.

However, Mr Wells’ attorney, former MP Gregory Moss, successfully argued that the now-Cabinet minister was “a public authority for purposes of the claim against him”. As a result, Ms Misiewicz agreed that the claim against Mr Wells was “statute barred” under both the Crown Proceedings Act and Limitation Act.

Mr Wells, who is currently minister of transport and local government, became embroiled in controversy in mid-July 2014 when the Stellar LOI was leaked to the media and he was accused of signing it on the Government’s behalf without the proper authorisation. He eventually departed his parliamentary secretary post some 80-90 days later.

The best explanation for the LOI affair came from Mr Wells’ former parliamentary colleague, Dr Andre Rollins, who described it as a “manufactured political controversy”. That matched evidence uncovered by Tribune Business, which suggested Mr Wells became a “fall guy”, or “sacrificial lamb”, in a battle between different Christie Cabinet factions over the New Providence landfill.

These factions were backing different private sector offers to take over the landfill, and the LOI is thought to have been leaked by one side in a deliberate effort to scupper Stellar’s chances by embroiling it in a firestorm of political controversy.

This newspaper obtained a May 26, 2014, letter written by Michael Halkitis, then-minister of state for finance, to the Inter-American Development Bank’s (IDB) Bahamas country representative stating that “the Government has issued an initial LOI” to Stellar Energy.

That letter was dated some five to six weeks BEFORE Mr Wells signed the LOI, suggesting key members of the Christie Cabinet knew of its existence in advance and of the Government’s intentions - at least at that point - to sign it. There is nothing, though, to suggest Mr Halkitis did anything wrong.

Stellar’s original statement of claim laid out multiple allegations. It described Messrs Allen and Forbes as government “agents” who promised then-prime minister Perry Christie would arrange a $40m guarantee for the project, and bragged: “We hold the key to the kingdom.”

The waste-to-energy group’s allegations placed Mr Christie and now-PLP leader, Philip Davis, at the centre of events leading up to the LOI’s disclosure and subsequent political firestorm although there is nothing to suggest they were guilty of any wrongdoing.

Arguing that the LOI’s leaking showed “clear intent at the Government level to sabotage” the $600m project, Stellar claimed Mr Allen, the former Urban Renewal co-chair, and Mr Forbes were “two of the private individuals who claimed to be representatives of the Bahamas government and/or agents acting for and on behalf of the Bahamas government”.


Well_mudda_take_sic 10 months, 2 weeks ago

Reward Wells is nothing but a Minnis-protected political hack. The missteps, incompetence, and corruptness of Wells has cost our society a fortune over the years. He should be relegated to the trash heap of our country's worst ever politicians. His constituents who voted for him in the May 2017 general election should hang their heads in shame while they go about seeking to find someone much more worthy of their vote next time around.


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