MercoPress. South Atlantic News Agency

FIG settles dispute with public works contractor

The Falkland Islands government and Gordon Forbes Construction have settled a several years dispute which will finally demand the disbursement of almost three million pounds.

The official announcement was made Friday following a meeting of the Standing Finance Committee in Stanley.

The dispute dates back to 1998 and involves payments claimed by Gordon Forbes Construction for construction work carried out in East Stanley

Chairman of the Standing Finance Committee Mike Summers described the case as "very complicated" which consumed an "enormous amount of time", and underlined that "we need to examine what lessons can be learnt from this experience in an effort to avoid a repeat".

The official release follows:

"The long running disputes with Gordon Forbes Construction have been settled.

FIG's Standing Finance Committee has today given its seal of approval to the settlement negotiated by the Chief Executive and the Principal Crown Counsel when they met with Gordon Forbes and his advisers in London on 12th October.

The disputes, which have been the subject of Arbitration proceedings and court hearings in the UK and the Falkland Islands and date back to 1998, were in respect of payments claimed by Gordon Forbes Construction for construction work carried out in East Stanley. In total, the additional payments sought have been calculated at approximately £3.7m plus substantial interest and costs.

Whilst FIG had succeeded in its defence of the majority of areas of claim, Acting Judge Christopher Purchas sitting in the Supreme Court in Stanley last June rejected FIG's appeal against the Arbitrator's final award given in July 2004 which left FIG with an obligation to pay substantial costs and interest to GFC in addition to payments which the Arbitrator had decided were due to GFC under the contract. Further claims exceeding £700,000 in value were still to be considered by an Arbitrator.

As at October 2005, the total value of the claims and payments due to GFC were estimated at almost £2.4m.

At the beginning of October, Executive Council instructed the Chief Executive to travel to London to try to negotiate a settlement of all existing and potential future claims in respect of the contracts.

Standing Finance Committee has today agreed to pay £1.6m to GFC in full and final settlement of all existing and potential claims which when added to FIG's own legal fees which total £1.361m produces a total cost of the cases to FIG of £2.961m.

Chairman of Standing Finance Committee, Cllr. Mike Summers commented:

"These very complicated cases have consumed an enormous amount of time during the last seven years and were still some way from being completed. The total cost to FIG is still over £700,000 less than the original claims. FIG is pleased that a settlement has been achieved to the satisfaction of both sides. We repeatedly received very firm and consistent legal and expert advice of the strength of our case to resist the payments claimed but it is plain that, in some respects at least, the Arbitrator and Courts felt differently. It was time to bring things to a conclusion. Quite clearly, we need to examine what lessons can be learnt from this experience in an effort to avoid a repeat. The Chief Executive and Principal Crown Counsel have been instructed to prepare a report for consideration at a future meeting of ExCo."