PHILIPSBURG--A judge in the Court of First Instance has ordered utilities company GEBE to pay back well over one million US dollars in wrongly charged water bills and fuel clause charges to The Westin St. Maarten Dawn Beach Resort and Spa.
Babitbay Beach Development Corporation NV had initiated legal proceedings against GEBE in July 2010, on which Judge Coen Luijks ruled Tuesday.
GEBE has been supplying water to Westin since the end of 2006/early 2007, for which it charged the resort NAf. 8 per cubic metre.
The Executive Council adopted mid-2005 a policy of reduced rates for large consumers. Taking into account that the water consumption at the resort would be in excess of 100,000 cubic metres per year, the resort would qualify for a rate of NAf. 5.429 (US $3) per cubic metre for which, according to the Island Government, a five-year contract should be entered "similar to other properties on the island."
However, according to Westin, GEBE did not adapt its tariffs and charged the resort the high NAf. 8 rate since December 2006, instead of the reduced rate of NAf. 5.429.
Westin had also noticed that a fuel clause charge had consistently, but at various rates, been included in the water invoices. "The resort had not been aware of the contractual or other legal basis for such charge, and neither has a proper understanding of the rates applied for the fuel charge and of the fluctuations in those rates," Westin's attorney Maarten Le Poole wrote in a letter to GEBE in November 2008.
Westin had requested that the Court order GEBE to pay $292,215 plus interest from March 25, 2009. It also demanded refunding of fuel clause charges over the years 2007, 2008 and 2009.
The resort further wanted the fuel clause taken out of the agreement closed by GEBE and Westin on January 6, 2009, and requested that the Court state that GEBE had not had the right to charge Westin a fuel clause over the years 2007 and 2008. It further requested that the Court order GEBE to pay the cost of the legal proceedings.
According to Westin, GEBE had been "unreasonable and unfair" in withholding from the resort the special tariff for bulk consumers.
As to the fuel clause, the resort stated that this rate had been charged illegally and the resort had not been obligated to pay because "oil fuel is only being used for the production of electricity and not for the production of drinking water."
According to GEBE, the resort was not covered by "any possible promise of the Island Territory of St. Maarten" and GEBE does not have to comply with any such promise. The resort should launch an administrative appeal against the Island Territory or Country St. Maarten, GEBE stated, adding that the agreement had been closed with Westin's holding company Columbia Sussex Corporation, not with the resort itself.
The Court decided to grant Westin's claim with regard to the fuel clause, because GEBE had not substantiated its objections to this claim, Judge Luijks stated.
The Judge did not follow the utility company's rejection of the lower water tariff either, and said that based on a March 11, 2005, letter of the Executive Council, Westin could have expected GEBE to apply the NAf. 5.429 rate over 2007.
The Court established that Westin's water consumption in 2008 had remained below the 100,000 cubic metres mark mentioned in the letter as defining a bulk consumer.
The judge set Westin's damages over 2007 at $168,455.39, and ordered GEBE to refund this amount with interest.
He further found it proven that GEBE had charged Westin illegally with a fuel clause for water usage in 2007, 2008 and 2009, and ordered GEBE to pay back the amounts, which attorney Wim van Sambeek said would be in excess of one million dollars.
The Court further stated that the January 2009 agreement between parties should be changed so that GEBE could no longer claim a fuel charge on Westin's water invoices. GEBE also was ordered to pay NAf. 13,631.50 in legal fees.
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