WILLEMSTAD - During the summary proceedings between the Curaçao Refinery Utilities (CRU) and the Caribbean Petroleum Refinery (CPR), CPR's lawyers are requesting the court to annul the debts that have accumulated since November 2022.
CRU indicated to the court that CPR has an outstanding debt that currently amounts to $8.2 million. The $8.2 million represents overdue rental payments. Additionally, CRU indicated that CPR owes a sum of $500,000 related to expenses from a mutual labor agreement. According to CRU, they performed some additional work for CPR, and this must be compensated.
Regarding all outstanding debts, CPR's lawyers have indicated to the court that there are several reasons to annul the debts. The $8.2 million debt that accumulated due to rental payment defaults, as stated by attorney Mr. Shannon Terpstra, was noted from the beginning that the rental tanks were not in an adequate state. Further investigations by expert Ethward Manuel also confirmed the concerns mentioned.
Ethward Manuel investigated the facilities at Bullenbaai, where the conclusion was that tank 9106 is not suitable for depositing "Fuel Oil." In an email, Manuel explains that there is insufficient information about how tank 9106 was adapted to handle "Fuel Oil" deposits. Manuel's investigation also concluded that there was no certified inspection carried out by CRU indicating that tank 9106 is suitable for bunkering "Fuel Oil." Lastly, Ethward Manuel points out that he noticed that the tank in question (9106) has contaminants inside that could affect the product imported by CPR.
According to lawyer Mr. Terpstra, who represented CPR, Ethward Manuel's inspection provides sufficient evidence that CRU failed to meet the obligations stipulated in the rental agreement with CPR. "This means that CPR is vulnerable to significant risks such as dangerous situations, contamination, and leaks in the tank," Terpstra explained in civil court. The main point in CPR's defense was that the rental price was based on tanks that functioned correctly, and in this case, the tanks had technical faults. Based on the technical faults on CRU's side, Terpstra argued that CPR should not have to pay the $8.2 million.
Can a third party also pay CPR's outstanding debts? In court, there was also a discussion about whether CRU could receive payment for the outstanding debts from a third party, which is not CPR. Based on OFAC compliance regulations, lawyers from HBN Law indicated that payment cannot be received from the other party. In this case, CPR proposed that Knob Trading SA pay the outstanding debts, but CRU refused payment from this company, citing accusations that Knob would engage with sanctioned companies in Venezuela.
CPR's lawyers indicated that the discussion with another partner not being able to pay CRU is against the law. Article 6:30 BW indicates that another party can pay off a debt, so it must be concluded that CRU is unwilling to accept further payments. Knob Trading SA also indicated through a letter that they are willing to pay CPR's outstanding debts, but CRU never responded to this letter.
According to CPR's lawyers, in this case, it must be concluded that CRU is in "default of obligations," and therefore, they are not entitled to receive payment for the outstanding debts either.
HBN Law, who represented CRU, stated that they cannot accept payments from Knob Trading SA, as collaboration between Knob and the Curaçao Refinery (RdK) could lead to RdK losing their OFAC license.