Cloudy Bay to pay K117mil

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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.