The Full Court has set aside orders that required the Ministry of Health to preserve two hospital construction sites and prevented interference with 52 containers and equipment at one of them, in the continuing dispute between the government and contractor VAMED Engineering GmbH.

Chief Justice Navindra Singh and Justice Zamilla Ally-Seepaul allowed an appeal by the Attorney General on Tuesday against five orders made by Justice Renita Singh on August 6. The orders concerned the unfinished Paediatric and Maternal Hospital at Goedverwagting, East Coast Demerara, and the New Amsterdam Hospital Campus.

The ruling does not decide whether the government was entitled to terminate VAMED’s contracts or whether either side owes the other money. Those questions remain for arbitration. The Full Court also left undisturbed Justice Renita Singh’s refusal to grant VAMED the other interim orders it had sought.

According to the court’s oral ruling, Justice Renita Singh had refused VAMED’s applications to prevent the ministry from taking possession of the sites, excluding its personnel and enforcing performance securities. She found that the proposed orders were, in substance, injunctions against the State prohibited by the State Liability and Proceedings Act. She also found that VAMED had not established the necessary urgency and that damages would be an adequate remedy.

Despite those findings, the judge ordered the preservation of both sites. She also barred the ministry and VAMED from opening or interfering with 52 containers and equipment at the Goedverwagting site, allowed VAMED security personnel access there, and required the ministry to preserve the contractor’s documents, designs, plans and intellectual property.

The Full Court found that the legal effect of those orders could not be changed by calling them “preservation orders”. Preventing the ministry from interfering with equipment and requiring it to allow VAMED personnel onto a site regulated the State’s conduct, the court said.

“Their description as Preservation Orders does not alter their legal effect,” Chief Justice Singh said in delivering the ruling.

The court also found that the statutory requirements for interim measures in aid of arbitration had not been established. In particular, it pointed to the earlier finding that there was no real urgency requiring the sites and property to be preserved until an arbitral tribunal was appointed.

The judges acknowledged that disputed ownership of the containers might have justified a preservation order if the necessary legal and factual basis had been established. They found that it had not been established in this case. Some of the orders were also too broadly worded, the court said, including the direction to preserve both construction sites without specifying what conduct was prohibited.

“The Preservation Orders cannot stand,” the court concluded. It set aside orders four through eight of Justice Renita Singh’s August 6 decision and awarded the Attorney General $500,000 in costs.

In a statement yesterday, the Attorney General’s Chambers said the ruling cleared the Ministry of Health to take possession of the sites, containers, equipment and associated construction materials and proceed with the projects as it sees fit.

The two design-and-build contracts have a combined value of €299 million: €149 million for the Paediatric and Maternal Hospital and €150 million for the New Amsterdam Hospital Campus. President Irfaan Ali said in August that the contracts had been terminated on July 23 and that International Chamber of Commerce arbitration proceedings began on July 28th.

VAMED has accused the government of failing to pay for completed work and allowing an export-credit arrangement supporting the maternal and paediatric hospital to expire. It has put its claims at €45.53 million, including sums it says were certified for payment. The government disputes VAMED’s characterisation of those amounts and says the contractor failed to meet milestones, mobilise sufficient resources and maintain the required pace of work. 

The 256-bed Paediatric and Maternal Hospital was originally projected for completion around August 2024. In February this year, Health Minister Dr Frank Anthony told the National Assembly that changes in VAMED’s ownership and management had contributed to delays. He said at the time that government engineers and company representatives were working on revised plans and completion schedules for both hospital projects. 

Attorney General Anil Nandlall SC appeared for the State with Shoshana Lall, Prithima Kissoon and Joshua Cullen. Nigel Hughes represented VAMED.