Published On: Mon, Feb 17th, 2020

SZV wins million-dollar court case in appeal, or did it?

SZV Offices - sleep

PHILIPSBURG – The court of appeals has ordered E’s Solutions, a company owned and managed by Eunicio Martina, to repay Social and Health Insurances SZV an amount of 1,757,550 guilders. The implications are that Martina, a former Chef de Cabinet under Minister of Justice Cornelius de Weever, received this money from SZV after a court ruling handed down by the Court in First Instance on June 12, 2018. The appeals court has now overruled that decision and ordered the company to pay back almost one million dollars to SZV. However, based on information StMaartenNews.com has received, this information is not completely correct. StMaartenNews.com suspects there is more to this story and further studying of the court verdicts in this ongoing case will have to be carried out.

On July 10, 2015, SZV signed a blanket agreement with E’s Solutions for the provision of advice and assistance in the fields of governance, risk management and compliance. On March 1, 2016, parties signed a so-called engagement letter that contained proposals for four projects and a termination clause that differed from the one in the blanket agreement.

In short, the letter established a minimum contract for 36 months; for early termination SZV would have to pay a penalty “equal to the total minimum amount of remaining hours over the remainder of the agreement multiplied by the hourly rate of the lead consultant.”

A little more than three months later, attorneys for SZV wrote to E’s Solutions that the situation was no longer tenable: “Martina keeps sending invoices for significant amounts of money while SZV does not have any control over work done by Martina and the invoiced costs. The proposed projects in their current form have become unenforceable and redundant.”

Based on these circumstances, SZV announced the termination of the blanket agreement and that it asked the court to dissolve the engagement letter without the obligation to pay a penalty.

The appeals court ruled that SZV had a reason for wanting to terminate the agreement: in its opinion, E’s Solutions fell short in its obligations from the agreement. For this reason the court ruled that E’s Solution cannot impose the termination clause: “a penalty is not due.”

The court furthermore found that E’s Solutions “apparently accepted that SZV no longer executes the engagement letter.” After July 6, 2016, there were no more contacts between the company and SZV and E’s Solutions did not do any more work for SZV either.

The court ruled therefore that parties had ‘mutually agreed’ to terminate the agreement and that they are both free from the obligations set forth in the engagement letter. The court considered that E’s Solution terminated the engagement letter and ruled out the payment of any compensation.

Apparently, SZV adhered to the lower court’s ruling of June 2018 and started paying E’s Solutions based on a payment arrangement. But now that the appeals court has ruled differently, the company will have to pay back the payments already made, plus the legal interest from the moment SZV made the payments until the moment of repayment. How much money needs to be paid back is unclear, however, when StMaartenNews.com contacted Martina with questions regarding this court case, the only statement he made was that the verdict of the court of appeal is being reviewed by E’s Solutions legal team and that no further comments are available at this time.