Barbara Gayle, Staff ReporterAn Italian company's $35 million increase in the cost to complete the transmission lines on the Spur Tree To Kendal highway, Manches-ter, has ended in the Jamaica Public Service Com-pany (JPSCo) and the Italian company being engaged in a legal battle in the Jamaican courts.
In early 1999 the JPSCo rejected Societa Industriale Montaggi Electtrici's (SIME) claim for an increase of US$486,609.78 and J$13,509,478.71 to complete the work. The dispute arose out of a contract between the parties whereby SIME agreed to carry out certain works on behalf of the JPSCo - namely Parnassus-Spur Tree- Kendal 138 steel town transmission lines - as well as supply of materials and execution of works.
SIME, in furtherance of the agreement embarked upon the performance of the contract. However, in February 1999, SIME claimed from JPSCo additional sums of US$322,567.33 and J$8,276,663.83. The amounts were later increased to US$486,609.78 and J$13,509,478.71.
The JPSCo rejected the claims and on August 12, 1999 SIME wrote to the engineer appointed under the agreement to decide the claim but the engineer rejected SIME's claim save for one item.
SIME, on being dissatisfied, issued a notice dated January 26, 2000 which purported to initiate arbitration proceedings against JPSCo.
SIME appointed Professor Antonio Briguglio of Rome as one of the three arbitrators in accordance with articles 5 and 7 of the Unciral Arbitration Rules. SIME also requested JPSCo to appoint an arbitrator within 30 days of the service of the notice. It also threatened JPSCo. that if it failed to appoint the second arbitrator, it would then request the Secretary-General of the Permanent Court of Arbitration at The Hague to designate the appointing authority to appoint the second arbitrator.
Injunction
The JPSCo took the matter to the Supreme Court seeking an injunction to bar SIME from proceeding to arbitration. The JPSCo which is being represented by attorneys Allan Wood and Ransford Braham, contended that the notice of arbitration and the initiation of arbitration proceedings were unlawful, invalid, void and of no effect. The JPSCo said it regarded the decision of the engineer as conclusive and binding as SIME had failed to notify the engineer of its claim to arbitration within 90 days as required by clause 67 of the general conditions of the contract.
SIME contended at the hearing of the summons that its actions were conducted quite properly and in compliance with the terms of the contract.
Justice Maurice Reckord heard the summons filed by the JPSCo and, on December 6 last year, granted the injunction barring SIME from proceeding to arbitration until the issue had been heard and determined by the Supreme Court. The judge said that damages would not suffice. He said in the event that the JPSCo was not successful at the trial, it would be in a position to honour any damages that the court may award.
The judge said that from the tone of SIME's affidavit, "it is clear that this defendant which is a non-national of Jamaica, has no regard for the Supreme Court of Jamaica. It claims that this court has no jurisdiction to adjudicate on some issues arising from this contract; that the court has no jurisdiction to grant any orders or declarations requested by the plaintiff on paragraph 2, 3, and 4 of the summons."
SIME which is being represented by attorneys Manley Nicholson and Lorna Phillips have appealed the ruling on the ground that the judge erred in construing the general conditions of the contract and the arbitration clauses. It is further contended that SIME acted properly and lawfully in appointing Professor Brigulgio as one of the three arbitrators required to be appointed.
When the appeal comes up for hearing later this year, SIME will be asking the court to find that it acted properly and lawfully in requesting that the Secretary-General of the Permanent Court of Arbitration at The Hague designate the appointing authority upon the JPSCo's failure to appoint an arbitrator within the required time.
It is also claiming that there was no agreenent between the parties as to the appointment of a single arbitrator, nor any agreement that the appointing authority should be the president of the Jamaica Institution of Engineers.
