The Court of Appeal has affirmed a stay of proceedings in a legal challenge initiated by Eastman Enterprises Ltd, a former contractor of Cepep Company Ltd, regarding the termination of over 300 contracts shortly after the April 28 general election. However, the appellate court overturned the High Court’s directive to refer the matter to the Director of Public Prosecutions (DPP). In a written ruling delivered on November 21, Justices Peter Rajkumar, James Aboud, and Ricky Rahim emphasized that Eastman was obligated to adhere to the contract’s alternative dispute resolution (ADR) procedures before pursuing litigation. The court found that the ADR mechanisms were sufficiently detailed and enforceable, rendering the lawsuit premature. Justice Rajkumar, who authored the decision, noted that while the Arbitration Act allows for court intervention in urgent cases, such relief should be sought within the arbitration framework agreed upon by the parties. He criticized Eastman for bypassing the ADR process entirely, stating that the trial judge’s decision to stay the claim was justified. The court also deemed the referral to the DPP as ‘premature and plainly wrong,’ citing incomplete and untested evidence. Eastman, which supplied 29 laborers to Cepep, argued that the termination caused significant hardship to both the company and its workers. Cepep, however, maintained that the contracts were terminated under a clause permitting such action without cause. The case is one of two legal challenges filed against Cepep’s decision to cancel 336 extended contracts, with the other initiated by PNM MP Stuart Young, SC, seeking judicial review against the Cabinet and Cepep’s leadership.
Cepep contractor suffers defeat as court upholds stay of ‘termination’ lawsuit
