Support Village Voice News With a Donation of Your Choice.
By Mark DaCosta- The High Court of Guyana has ruled that businessmen Otillo Pereira and Troy Phillips must repay more than $83 million to investors Jamal and Ian Shamsudeen. The court found that Pereira and Phillips failed to meet their financial obligations in a supermarket investment deal, which led to claims of unjust enrichment and a failure of consideration. The Shamshudeens were represented by attorney, Senior Counsel, Roysdale Forde while, Attorney Nigel Hughes and Jed Vasconcellos represented Pereira and Phillips.
The case stemmed from a business arrangement in which Pereira and Phillips, directors of the New Nigel Supermarket, received substantial funding from the Shamsudeens. However, the arrangement quickly soured as no formal agreement regarding repayment terms was established. This lack of clarity ultimately resulted in a legal battle over the return of the funds.
The core issue presented before the court was whether the evidence established a basis for holding Pereira and Phillips liable, both as individuals and as directors of their company, Reguim International Inc. The court had to determine whether there was a legally binding agreement between the parties and if the sums advanced by the Shamsudeens were repayable.
According to court documents, in November 2018, Pereira approached the Shamsudeens with a request for a loan of $70 million. He intended to use this money to purchase and refurbish the New Nigel Supermarket, a business venture for which he held a power of attorney. After some deliberation, the Shamsudeens agreed to lend him the requested amount. However, the terms of the loan, particularly the timeline for repayment, were vague and not formalised at the time. The investors expected Pereira to repay $35 million within six months and the remainder by January 2020. In response to this arrangement, Pereira reportedly offered a non-committal “we will see.”
Despite the lack of formal terms, the Shamsudeens advanced the funds. In subsequent discussions, the funds were reflected in a debt recovery proposal prepared by Pereira and Phillips’ company, which suggested a 20-year repayment plan. This plan was submitted to Republic Bank, but there was no record of the Shamsudeens agreeing to this lengthy repayment period.
Justice Fidela Corbin, presiding over the case, found that while the funds were advanced with an expectation that a clear agreement would be reached, this never occurred. The judge ruled that the failure to finalise the terms of repayment constituted unjust enrichment on the part of Pereira and Phillips. Unjust enrichment occurs when one party benefits at the expense of another in circumstances deemed unjust by law. In this case, Pereira and Phillips had gained access to the funds without properly fulfilling their obligations or establishing a clear defence to retain the money.
The court therefore ordered that Pereira repay $12.35 million to Jamal Shamsudeen, while Reguim International Inc., the company involved in the supermarket venture, was ordered to return $36 million to Jamal Shamsudeen and an additional $35 million to Ian Shamsudeen. These amounts represented the total sums advanced by the investors.
This case highlights the critical importance of formalising business agreements, particularly when significant sums are involved. The failure to clearly establish the terms of repayment in this case left both parties at odds, resulting in a costly legal dispute. For business owners and investors in our country, this serves as a cautionary tale of the potential pitfalls of informal business dealings.
The judge also took into consideration the legal costs associated with the case, recognising the time and effort expended by both sides. As a result, costs were awarded to the defendants, Pereira and Phillips, in the sum of $1.5 million. This award reflects the court’s consideration of the nature and value of the claim, as well as the reasonable rates for legal representation.
In the broader context, this ruling underscores the necessity for businessmen in Guyana to ensure that legal frameworks are in place when entering into significant financial transactions. Our nation’s legal system, as seen in this case, provides recourse for those who may find themselves wronged by unclear or unjust business practices.
