Jul 2012
BRITISH VIRGIN ISLANDS
COURT OF APPEAL
CONTRACT – BVI APPEALS – CONSTRUCTION OF CONTRACTS – ESTOPPEL – UNJUST ENRICHMENT – TRIAL JUDGE’S PRIMARY FINDINGS OF FACT – FUNCTION OF APPELLATE COURT
The case concerned an agreement between the BVI Government and Ocean Conversion (BVI) Limited (“Ocean”) for Ocean to produce potable water up to a maximum quantity for public consumption.
The Government had an option to purchase the plant for an agreed sum at the end of the first seven-year term. If the agreement was renewed for another seven years, at the end of that period the plant would belong to the Government without further payment. At the end of the first seven year term, the Government purported to exercise the option to purchase the plant. Events transpired that led Ocean to believe that the contract had been renewed for a further seven years. Over the course of the first and second seven-year terms and at the request of the Government, Ocean spent an additional US$4.765 million expanding the plant in order to increase Ocean’s capacity to provide more potable water for public consumption. The plant that was eventually turned over to Government, more than seven years after the exercise of the option, was not the original plant subject to the agreement. The old plant for which Government had agreed to pay the sum of US$1.42 million was entirely replaced. The Government refused to pay the additional sum and claimed it was entitled to possession of the plant without compensation to Ocean. Ocean claimed to be entitled to the additional sum of US$4.765 million.