~ NAGICO reviewing ruling ~
AIRPORT--An arbitration panel consisting of arbitrators appointed by Princess Juliana International Airport Operating Company (PJIAE), NAGICO Insurances and the Court of First Instance, has ruled in favour of PJIAE in the settlement of a US $71 million insurance claim against NAGICO, the company’s principal insurer.
Under the terms of the arbitration ruling, PJIAE was awarded a principal claim (excluding interest) of US $71,864,341 including the $58 million that NAGICO has already paid out to PJIAE in an advance settlement.
The ruling was handed down on Tuesday, August 13, and the total awarded is more than double the amount of $32.5 million that NAGICO was willing to pay to PJIAE.
In an invited comment, NAGICO Group of Companies Chief Strategy and Development Officer Kyria Ali said, “We confirm that correspondence in relation to the PJIAE arbitration matter was recently received. Our team is currently reviewing same; thus, we are unable to comment at this time.”
PJIAE Chief Executive Officer (CEO) Brian Mingo said that while the settlement will greatly assist in the airport’s recovery and rebuilding plans, a good part of the funds (50 per cent) has already been paid. He said the insurance proceeds will be mostly used to re-build the airport’s main terminal in its upcoming reconstruction project.
Mingo said the claim has been awarded in PJIAE’s favour in the order of material damage ($51,269,728), business interruption damage ($17,963,013) and cost of advisors ($2,631,600). There still remains a matter of PJIAE’s claim for damage to furniture, for which management has been asked to provide additional information, Mingo said.
In the case of material damage to the airport, the arbitration panel has determined that the airport was not underinsured as NAGICO had previously claimed, and therefore it could not apply the average clause which would have yielded a lesser amount in settlement for PJIAE. However, the panel ruled that a two-per-cent deductible amount of the insured sum could be applied by NAGICO, trimming the final amount for material damage to $51,269,728.
Mingo said that when an impasse was reached between the airport management and NAGICO Insurance assessors last year, the natural step was to have an independent arbitration panel settle the differences between the two parties.
“We have stated all along that we have a solid claim based on our policy with NAGICO and I am very pleased that the management team held on to their resolve with the support of our legal representatives, and were able to secure the balance of our claim against NAGICO,” said Mingo.
He acknowledged that some line items on the airport’s claims have been denied. However, he said that these denials did not form a substantial part of the total claim. He will continue to pursue the claim for loss and damage to airport furniture in keeping with another concession of the arbitration committee, as long as additional damage assessment reports and information can be provided.
The airport thanked all the teams that have assisted and participated in the process. PJIAE was assisted by its damage experts John Trupiano of Corgan and Mark Gallagher of Willis Towers Watson, its arbitration/legal team Eric R. de Vries and Michiel van den Brink of HBN Law and “the excellent team” of PJIAE in-house professionals and employees, with full support of its supervisory board and shareholder, to whom Mingo extended gratitude.
“PJIAE believes the outcome of the procedure is bittersweet: not the total amount that was claimed, but the 51 per cent awarded adds up and enables us to carefully plan and execute the reconstruction of the airport. We need to be careful how we spend the funds, on the real needs and improvements of the airport and the economy of St. Maarten,” Mingo said.
He expects NAGICO to settle payment on the balance of the claim with interest within the next few weeks, also with a proposal for compensation for the pending interior line item.
“If we can get everyone on board and create a cooperation among all stakeholders, our airport will be fixed quicker and easier. Our economy can then again thrive back to its glory days. Anything else defeats our efforts,” Mingo said.