Mon | May 25, 2020

Fly Jamaica US$4.28m court award put on hold

Published:Thursday | April 9, 2020 | 12:31 AM
AP 
In this file photo of  November 9, 2018, a Fly Jamaica Boeing 757-200 aircraft, which overshot the runway, sits at the northeastern takeoff end of the runway at the Cheddi Jagan International Airport, in Georgetown, Guyana.
AP In this file photo of November 9, 2018, a Fly Jamaica Boeing 757-200 aircraft, which overshot the runway, sits at the northeastern takeoff end of the runway at the Cheddi Jagan International Airport, in Georgetown, Guyana.

A US$4.28 MILLION court award to Fly Jamaica Limited for breach of contract against ADS Global Limited, the company that operated the airline’s call centre from 2012 to 2014, has been put on hold pending an appeal.

However, a stay of execution of the judgment was also granted by the appeal court on condition that ADS Global provides $25 million as security. The award itself translates to J$588 million at current exchange rates.

Court of Appeal Justice Marva McDonald-Bishop, who wrote the decision on behalf of the three-member panel, based on an application brought by ADS Global for a stay of the judgment, found that the company has some prospect of success in the substantive appeal, even if it is only concerning the grounds challenging damages made by Supreme Court Justice Carol Edwards in favour of Fly Jamaica.

In 2012, court documents show, ADS Global, which was acting as an agent for Columbus Communications Jamaica Limited, was contracted to provide telephone, Internet and call centre services to the airline.

At some point, Fly Jamaica was said to have fallen into arrears with payments on several invoices and on May 15, 2014, ADS Global notified the airline that services would be terminated or suspended for non-payment.

Fly Jamaica said its assessment of the statements showed that the invoices for the phone and Internet services had been paid, and that it pointed out to ADS Global that only the call centre services could have been lawfully suspended.

ADS Global disconnected the call centre services as well as the telephone and Internet services that same month.

At the time of the suspension of the services, Fly Jamaica was querying some of the invoices, some of which, it asserted, were sent to it after the suspension of its services.

Fly Jamaica refused to pay the sums demanded on the invoices in dispute, even after the services were disconnected.

ADS Global filed a claim in the Supreme Court alleging that Fly Jamaica was in breach of all three contracts based on the non-payment of the invoices it had sent to it for payment for services rendered.

The carrier brought a counterclaim against ADS Global for damages for breach of contract, which partially succeeded, and was awarded US$4.28 million.

Justice Edwards found that Fly Jamaica did not repudiate all three contracts when it refused to pay outstanding and future invoices. Fly Jamaica queried the invoices, which it had a right to do, she said, adding that the airline had not taken any of the steps prescribed by any of the contracts for its termination.

Court of Appeal Justice McDonald-Bishop, in granting ADS Global’s application for a stay of the Supreme Court award, said the court was mindful that Fly Jamaica, regardless of its financial predicament, was entitled to its judgment.

At the same time, she said, ADS Global must not be denied access to the machinery of the court to vindicate its rights, in light of the finding that its appeal was not without merit.

A date for the hearing of the substantive appeal has not yet been set, ADS Global’s attorney, Kent Gammon, told the Financial Gleaner. Attorneys K.D. Knight QC, Stacey Knight and Ashleigh Ximines represented Fly Jamaica.

The airline ceased flying last year, having failed to recover after one of its aircraft crash-landed in Guyana in November 2018.

mcpherse.thompson@gleanerjm.com