By Barbara Gayle, Staff Reporter
Michael Hylton, Q.C, Solicitor General.
MICHAEL HYLTON, Q.C, Solicitor General, has said that if the Government's only defence against the Ezroy Millwood-led National Transport Co-operative Society (NTCS) was on a technical ground, he would have recommended that the case be settled.
Mr. Hylton pointed out that the Supreme Court made findings in the Government's favour on substantive grounds which were really findings of law.
Last week Monday Mr. Justice Patrick Brooks set aside the $4.5 billion award which the arbitrators had awarded in October last year. The award with interest had amounted to $8.5 billion.
Mr. Millwood sued the Government after it took over the public transportation system in the Kingston Metropolitan Transport Region (KMTR), with nearly five years still left on a 10-year agreement it had entered into with NTCS and two other independent franchise holders.
ARBITRATION
The parties subsequently agreed to arbitration. In October last year, the arbitrators ruled that NTCS should be paid $4.5 billion for the years 1995 to 2001 with interest to be calculated from the end of each accounting year at the Treasury bill and commercial bank rates.
Mr. Hylton in explaining what happened after the award was handed down, said the Govern-ment could not appeal to the Court of Appeal against the award because there was no provision in law to do so. He said the only course open to the Government was to challenge the arbitrators' findings of law and that could only be done in the Supreme Court. The arbitrators also made findings of facts.
"There were findings of fact we disagreed with but we could not challenge them," Mr. Hylton said. He pointed out that the arbitrators found that the NTCS suffered losses of $4 billion but the Govern-ment could not challenge that because it was a finding of fact.
The technical ground which Mr. Hylton was referring to was the judge's finding that the Minister of Transport did not have the authority to grant the licences.
Mr. Hylton said the Government had filed eight grounds of appeal. Lawyers for the NTCS conceded to two of the grounds, the Government abandoned two of them and argued the other four. He said the two grounds which the NTCS conceded to were to rulings which the arbitrators had made in favour of the NTCS.
CONCESSIONS
He explained that when the NTCS conceded to two of the grounds, the effect of the concessions reduced the $8.5 billion award to $4.4 billion. One of the concessions was in relation to the losses the NTCS suffered. The arbitrators said they believed the evidence the NTCS gave in relation to its losses.
Mr. Hytlon said when the lawyers representing the parties did their own calculations, they found that the amount the arbitrators had awarded for the losses was incorrect. NTCS also con-ceded that because the award would have been profit, tax would have had to be paid from it.
Mr. Justice Brooks, in ruling in favour of the Government, said in his judgment that the arbitrators erred in holding that the 1996 Heads of Agreement did not vary or amend the 1995 Franchise Agreement.
"This was an error of law on the face of the record and therefore the arbitrators misconducted themselves in so holding. The consequence is that the arbitral award must be set aside," he judge ruled.
PRELIMINARY APPLICATION
The judge held further that the arbitrators erred in dismissing the preliminary application by the Government that the 1995 Franchise Agreement be declared invalid. Commenting further, the judge said the arbitrators ought not to have refused to accept that the granting of the licences by zone was ultra vires and void. The judge described that as an error in law which was evident on the face of the record and as such constituted an act of misconduct.
It was also the judge's finding that the arbitrators erred by failing to hold that the NTCS failed to take reasonable steps to mitigate its losses. He said the arbitrators failed to consider the point when they ought to to have done so. "These omissions also constituted errors in the face of the record and accordingly amounted to misconduct in the sense of section 12 of the Arbitration Act," the judge held.
The NTCS is taking the matter to the Court of Appeal.
