WILLEMSTAD - Ritz Residence Exploitatie B.V. must pay an amount of approximately ANG. 350,000.- to contractor LB Constructie. That is the outcome of the proceedings on the merits that the parties have fought against each other in Arbitration. Because this is an arbitration procedure, the decision is irrevocable; Ritz has to abide by the sentencing. According to lawyer Michele Schakel-Meyer, who acts on behalf of LB Constructie, there is finally justice.
The Arbitration Court of the Caribbean Arbitration Institute Foundation (CAI) made its decision on Tuesday afternoon, May 24, 2022. Ritz has been ordered to pay ANG 272,566.51, plus the statutory interest on that amount with a surcharge of 2%. Ritz must also pay LB's legal costs, in total an amount of ANG 63,586.80, in addition to the extrajudicial collection costs, estimated at a fixed rate of ANG 5000.
The dispute concerns the construction of Ritz Residence, five apartment blocks behind Ritz Village in Scharloo, by entrepreneur Hans Robben. The arbitration case was initiated by LB Constructie, after client Ritz Residence failed to pay LB's bills for a long time. In the absence of payment, LB decided to terminate the construction in an unfinished state and to claim their outstanding claims through the arbitrator. Ritz filed a counterclaim, citing construction errors and construction delays caused by LB. In its judgment, the Tribunal made short shrift of Ritz's claims. The court was in favor of LB on almost all counts, while Ritz's entire counter-claim was dismissed.
The construction of Ritz Residence by LB started in February 2020. After a year, payment arrears started to build up. Although LB always kept to its contractual agreements, made alternative agreements to bring the construction to a successful conclusion, client Robben repeatedly took the position that there were construction errors. According to LB's lawyer, this involved trivialities or responsibilities that lay with Ritz itself, or matters that could easily be solved during the regular maintenance period, as is usual with construction projects. When payment failed to materialize and Ritz thwarted several completion dates, LB Constructie decided to exercise a lien, placing fences around the project and giving them actual control over the construction project until the bills were paid by the client.
In a subsequent summary lawsuit filed by Ritz, the judge gave LB and Ritz the opportunity to reach an agreement. Salient: when the parties had reached an agreement and requested the judge to suspend the case for the time being, the judge erroneously reached a decision to the detriment of LB: the right of retention had to be abandoned. According to LB's lawyer, this unnecessary and unsolicited judgment has sent out an incorrect signal, as a result of which LB has suffered unnecessary damage and has been cast in a bad light. LB has appealed against the ruling and the directors of LB have filed a complaint with the Court of Justice regarding the unnecessary ruling. The decision in the Higher Appeal is expected in the near future, but will not change the fact that Ritz has to pay approximately 3.5 tons to LB. In the Arbitration ruling this week it has already been ruled that the right of retention has been correctly applied and that the costs incurred for this will be borne by Ritz.
Arbitration is a form of dispute settlement, which can be chosen instead of ordinary jurisdiction. In this specific construction dispute, the parties have agreed that they will not choose ordinary jurisdiction in the event of a dispute, but will have a judgment rendered by an Arbitrator. After consultation between and approval of the parties, the arbitral tribunal has appointed two independent local construction experts to inspect the construction project and to make reports and calculations.