Vijay Construction unable to provide proof of payment, asks judge for extension | 11 August 2020
On July 24, 2020, Judge Ellen Carolus granted Vijay Construction a stay of execution application which temporarily suspended the freezing of its assets and this came with the conditions that within 14 days of the date of the ruling, it would provide security in the form of a bank guarantee in the sum of twenty million euros (€20,000,000).
The deadline for the proof of payment came and went yesterday with Vijay Construction unable to provide a bank guarantee.
The lawyer for the company, Bernard Georges, noted that the bank was unable to provide Vijay Construction with a guarantee, so yesterday morning he filed two motions before the court. The first is to revisit the conditions of the stay of execution where they are able to give some other form of guarantee. The second motion was to grant Vijay Construction the right to plead the conditions before the Court of Appeal.
Mr Georges noted that for the time being, business is running as usual for the construction company and all workers are getting paid.
The two motions are scheduled to go before a judge tomorrow, Wednesday August 12, 2020.
Vijay Construction had been ordered to pay Eastern European Engineering Limited (EEEL) €20,000,000 – a little over €16.6 million in line with a UK court order from 2015 as well as €3.56 million in interest.
This followed a dispute between Vijay Construction and EEEL, a company registered in Seychelles and a subsidiary of holding company Guta group which is a multi-national conglomerate with headquarters in Russia. The group is the owner and operator of the Savoy Resort & Spa.
The EEEL hired Vijay Construction to carry out construction work for company Savoy Hotel in 2011 through six contracts. Each of the six contracts included similar arbitration clauses, which provided that any dispute, disagreement or claim would be settled by arbitration in Paris.
Following a dispute, EEEL filed a request for arbitration in September 2012 before the International Chamber of Commerce in Paris.
A sole arbitrator delivered an award in November 2014 in favour of EEEL, but the costs to be incurred by Vijay Construction for breaking the contract were never paid because the award was not enforceable in Seychelles which was not party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
The award and its orders are now enforceable since Seychelles officially acceded to the Convention earlier this year.
Vijay Construction has been in operations for more than four decades in Seychelles.