Airport St. Maarten and NAGICO get one more week to settle insurance claims

PHILIPSBURG--The Court has given Princess Juliana International Airport (PJIA) Operating Company N.V. and National General Insurance Corporation N.V. NAGICO one more week to settle PJIA’s post-Hurricane Irma insurance claims.
 
In case parties fail to reach an agreement by Monday, July 23, at 5:00pm, the Judge will give his decision in summary proceedings on July 30.
 
This is the second time the Judge granted parties extra time to negotiate in the injunction, which was filed by PJIA on May 14. The negotiations, which started after the first Court hearing of June 19, did not lead to very substantial results as the parties’ standpoints are still miles apart, lawyers informed the Court on Monday.
 
PJIA was severely damaged by Hurricane Irma on September 6, 2017. As a result, the airport had to be temporarily closed. Today, PJIA is still provisionally operational using temporary tents and other facilities.
 
Due to the loss of revenues for the airport, as a result of fewer aircraft and passengers, while the fixed expenses continue, such as wages for employees, the loss of earnings is enormous, PJIA claims.
 
The airport claims damages to the amount of US $134.2 million, consisting of $105.7 million in material damage and $28.5 for profit loss. This is well within the $193-million policy under which the airport is covered for damage, which includes coverage for loss of profit to the amount of $29.5 million, PJIA stated.
 
Represented by attorney Michiel van den Brink, PJIA called on the Court in summary proceedings to order NAGICO to pay PJIA $72.6 million, and three monthly instalments of $2.3 million as per June 1, July 1 and August 1, 2018, with legal interest.
 
After negotiations with PJIA NAGICO was prepared to pay out $37,359,978, including an amount for business interruption, but said PJIA had not responded to the proposal. NAGICO paid out advances of $25 million in total.
 
NAGICO, represented in the injunction by attorneys Arnold Huizing and Richard Gibson Jr., refuted the claims and stated that establishing the damage of 26 items, including the airport terminal, is no simple task.
 
“This is not a simple residential building that suffered damage. To establish the damage, it is required for PJIA to submit per item a full scope of work, bill of quantities and contractor’s estimates,” Huizing said during the June hearing. “Without this information it is not possible to establish the actual damage.”
 
Between October 2017 and May 2018 PJIA submitted eight reports with more than 400 pages and photos to prove that damage was suffered. However, according to the insurer, none of these reports provided indications of the real cost of repair.
 
NAGICO is demanding a “fully quantified and documented” claim, which is to include contractor estimates for all proposed repairs and copies of the scope documents on which prospective contractors are being asked to tender; a detailed and fully documented claim list allocating the items under the respective headings in the policy schedule; as well as 24 monthly management accounts and a copy of the last annual financial statements prior to the loss.
 
“Without the required information it is impossible for NAGICO’s adjusters to establish a responsible and substantiated claim,” said Huizing.
 
Efforts to come to an agreement under guidance of a mediator failed in early April. Parties started negotiations in the past four weeks based on a PJIA report about the material damage to be compensated, but Van den Brink said Monday that not much progress had been made even though an agreement has been reached on some points.
 
“NAGICO loses sight of the interests of PJIA and PJIA requests that the claim be awarded,” Van den Brink said. NAGICO’s lawyer said parties had failed to reach an agreement due to PJIA’s “unwillingness.”
 
“The damage has already been estimated and reported over and over again,” said Van den Brink. NAGICO is only “stalling” and trying to “buy time,” he said.
 
NAGICO said it understands the urgency, but that it concerns a large and complicated process involving many items which need to be assessed piece by piece.
 
Technical surveyors informed the Court that damages have been assessed but still need to be quantified. Progress has been made but parties, including the airport’s redevelopment project manager, are not yet ready for final negotiations as the largest differences of opinion are in the fields of mechanical and electrical damage.
 
Despite the “large differences of opinion, misunderstandings and a lack of information” where the actual cost is concerned, the Judge still sees room for continued negotiations as in summary proceedings only a global first estimate of the damages is required.
 
After a brief recess, the Judge said that he understands that assessing the full damage is a matter of length, but the airport is entitled to a quick decision to enable it to start reconstruction.
 
The Judge also was to make a decision on the business interruption claim, but this was also postponed pending the negotiations and a possible verdict.

The Daily Herald

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