The legal proceedings filed by Demerara Distillers Limited (DDL) challenging Guysuco's decision to give preferred access to its Berbice molasses production to Angostura Limited will come up for hearing in the high court in February 2005.
In an affidavit by its managing director Komal Samaroo DDL had contended that it had a legitimate expectation or right to a first call on the purchase of molasses produced by Guysuco, sufficient for its annual requirements, by reason of its own past experience, the established practice of Guysuco, the obligations of Guysuco as a monopoly, the representations and undertakings of Guysuco and the government of Guyana, its sole shareholder.
In an affidavit in reply by Michael Knight, as Acting Chief Executive Officer of Guysuco, it is denied that DDL is entitled to a "first call" if this means an entitlement to all the molasses it requires for the indefinite future to the detriment of Guysuco's business expansion programme and commercial feasibility. He says molasses was supplied by both the Caribbean Molasses Company Limited ("CMC") and Guysuco to DDL on the basis of annual agreements, with a few exceptions.
Knights denied that DDL and Guysuco have had the lengthy commercial relationship with regard to the sale and purchase of molasses that is implied. He says DDL was supplied with most or all of its molasses requirements by CMC.
DDL has, since the year 2000 and the demise of CMC, been offered the option of purchasing molasses from Guysuco before it is offered to any other purchaser merely because of the convenience of doing so, DDL being located in Guyana. At the end of each year, he says, DDL and Guysuco would engage in discussions leading to an agreement or agreements regarding the price and quantity of the annual production of molasses for the following year.
Knights denied that Guysuco is a monopoly as regards the production of molasses as a result of being the sole producer of sugar in Guyana as he says molasses is merely a by-product of sugar. Guysuco's case, as disclosed in the affidavit, is that the Government of Guyana does not control and direct the company. While the Government of Guyana exercises the rights and duties of a shareholder it does so through the Board of Directors of Guysuco on which the main opposition party is normally represented. The Government of Guyana does not impose the control and direction implied by DDL, it says.
Knights claims that DDL has alternative sources of molasses available to it internationally, including from Brazil, Nicaragua, Mexico and other countries in South America from whom shipping costs would be minimal.
He denies that the President of Guyana has ever sought to direct Guysuco on any matter and therefore he contends that the assurance that DDL claims to have received from the President is merely a view expressed by the President, albeit one which Guysuco would seriously consider.
He has been advised by Guysuco's Attorneys-at-Law, that the Board of Directors of Guysuco is the only body lawfully authorised to make decisions on behalf of Guysuco, save for the members at a members general meeting.