Cloudy Bay ordered to pay K117m in damages
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Cloudy Bay ordered to pay K117m in damages
PORT MORESBY: The National Court ordered Cloudy Bay Sustainable
Forestry Limited to pay K117,480,118.92 in damages to its sub-contractor Pako F
and C Holdings (PNG) Ltd for wrongful termination of its service contract.
Details of the hefty compensation for breach of
contract awarded by Justice Thomas Anis were reported by The National:
Cloudy Bay to
pay K117mil
September 23, 2021The
NationalMain Stories
By KARO JESSE
THE National Court, on the eve of Independence Day, ordered Cloudy Bay
Sustainable Forestry Ltd to pay K117,480,118.92 in damages to its
sub-contractor Pako F and C Holdings (PNG) Ltd for unlawfully terminating its
service contract.
Justice Thomas Anis entered judgment in favour of Pako for the sum of
K74,615,861.78 together with pre-judgment calculated interest of K42,864,257.14
against Cloudy Bay.
He also ordered that the judgment sum, inclusive of interest, that is due and
payable was K117,480,118.92 which should be paid within 30 days from the date
of service of the order on Cloudy Bay.
Justice Anis further ordered that the interest shall accrue at the rate of
eight per cent per annum on the total judgment sum after the expiry of the 30th
day of service of this order upon Cloudy Bay, and where full payment of the
judgment sum is not settled within the 30 days, the interest shall continue to
accrue at that rate until the judgment sum was settled in full.
The damages relate to a breach of service contract by Cloudy Bay which it
entered into with Pako on a logging area in Central.
The area is called Bonoabo, located in Abau.
Pako was contracted by Cloudy Bay to log, saw and sell sawn timber at set
prices to Pako.
The five-year term service contract was signed by both parties on Nov 18, 2013.
However, on April 14, 2014, Cloudy Bay gave a written notice terminating the
contract.
Following that, both parties filed proceedings which were jointly heard, thus,
the court dismissed Cloudy Bay’s claims and entered judgment in favour of Pako
with damages to be assessed in regards to its cross-claim and claims in the
proceedings.
Justice Anis noted that the breach of the service contract was substantial,
thus, it severely affected the business operations.
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