Ashcroft, BCB Holdings and affiliates bring heavyweights to challenge Belize law

In an unending tangle of foreign and local litigation between the Michael Ashcroft group and the Government of Belize, a team of legal heavyweights appeared on Wednesday and Thursday before Supreme Court Justice John Muria, as they argued over a very technical piece of legislation with potential for multi-million-dollar implications on the public purse.

By now, every Belizean paying attention to the news knows that the Government of Belize has been the center of a slew of multi-million-dollar arbitration proceedings, and the Dean Barrow administration had taken the stance that it would not expend public resources overseas to defend those cases, but would fight when the litigants try to enforce their awards on the home front.

The Barrow administration has also passed legislation to specifically deal with the issue of arbitration, as well as introducing stiffer penalties for ignoring court injunctions to stop overseas arbitration.

Readers may recall the debate over recent amendments to the Supreme Court Judicature Act (Chapter 91 of the Laws of Belize). In essence, the government had passed a set of amendments but is putting through new revisions, due to go to the Senate on Friday, October 1.

These amendments address the prosecution of persons who disobey or ignore a court order to stop arbitration proceedings, and also the seizure of assets of a convicted person against whom both fines and prison terms can be levied.

In the case before Muria this week, the seven claimants who are suing the Government of Belize in claim #274 of 2010 are British billionaire and executive chairman of the BCB Holdings group, Michael Ashcroft; former president of the Belize Senate, attorney Philip Zuniga; former executive chairman of the Belize Telemedia Limited (BTL), former BTL chairman and ex-Central Bank governor, Keith Arnold; along with other members of the Ashcroft group – Jose Alpuche, Philip Osborne and Ediberto Tesucum.

Additionally, there are nine interested parties: BCB Holdings Limited, the Belize Bank Limited, Phil Johnson, Ken Robinson, Thanet Financial Services, The Swan at Westgate Limited (England), Jacdaw Investment Limited (Ireland), Shawn Breeze, David Hammond, John Lambie and Paul Biffen.

The BCB’s legal team includes former UK Attorney General, Peter Goldsmith, QC; and Edward Fitzgerald, CBE, QC. Local reps are Eamon Courtenay and Pricilla Banner.

The interested parties, according to attorney for the Government of Belize, Lois Young, SC, are shareholders of BCB Holdings.

Speaking in court this morning, Young, who appeared along with Dr. Lloyd Barnett of Jamaica, a member of the Regional Judicial Legal Services Commission who has been hired to defend the government, pointed out that the court has the power to punish for contempt.

“The power of the court to issue anti-arbitration injunctions has been there for hundreds of years,” said Young. “It is a common law power. That it is now being recognized in a codified form does not make it unconstitutional.”

Attorney for the interested parties, attorney Godfrey Smith, said that the amendments introduce very serious penalties for breach of a court injunction: five years imprisonment and hundreds of thousands in fines. He said that three months is the usual penalty, and claimed that the Government, which he said had threatened the Ashcroft group with penal sanctions, is doing it to target his clients.

“This isn’t intended to target regular people. This is targeted at particular individuals,” said Smith, in an interview with Amandala today.

The fact that later in the legislation it speaks of arbitration, and making an arbitration award null and void makes it obvious that the government is targeting individuals, said Smith.

He commented that when the Belize Constitution at Section 65 gives power to legislate for peace, order and good government, it does not give carte blanche to make any piece of legislation. Smith said that he can only remember one case where someone was taken to court for contempt.

“You can’t make legislation specifically to target people,” he commented.

Responding to Smith’s allegation, Prime Minister Barrow said today to Amandala that there is nothing in the legislation to single out any targets.

Smith said that in the amendments, the Attorney General is the person who would decide whether to use the old contempt of court provisions or the one set out in the recent amendments. That person can seek to jail the accused for pursuing arbitration, Smith said.

“In this case the Attorney General is a party to many of the arbitrations that they are seeking to ‘injunct,’ so we can plainly see where something has got to be wrong,” said Smith.

He also said whereas the accuser usually has to prove the case, the amendments reverses burden of proof and puts it on the accused.

Smith described it as “an array of truly alarming, outrageous measures….”

Explaining the new provisions of the law, Young told the court that the law will make it clear that the accused can only be penalized if he or she knowingly disobeyed or failed to comply with the order. The person would be tried summarily by the judge without a jury.

Young said that the penalty for a natural person convicted by the court would range from $50,000 to $200,000, or 5 to 10 years in prison, or both. If the convicted person continues the infraction, the fine applied is $100,000.

If the convicted person shows extenuating circumstances demonstrated by previously being a law abiding citizen who committed the offense only in sheer ignorance, or for whom the penalties would impose severe hardships, the fine would then range from $5,000 to $10,000 and imprisonment, a minimum of one year in default.

For a company or firm, however, the penalty would range from $100,000 to $500,000, with the tab increasing $300,000 a day for continuing the offense.

In a prior case before Justice Samuel Awich which also went on appeal, said Young, the same seven claimants had contended that they have no control over the business of Hayward Charitable Trust, which had sought arbitration against the Government over the nationalization of BTL through Dunkeld Investments of the UK.

The Court of Appeal had determined that there was not sufficient evidence to establish a nexus between the claimants and Dunkeld, between the claimants and Hayward when they had sued as trustees last year.

Young contended before Justice Muria Thursday that none of the claimants have locus standi to bring the case against the Government of Belize, and none of them are at risk in light of the Court of Appeal judgment.

The attorney for the claimants say that they had been forced to resign their advisory roles with Hayward, whereas Zuniga’s affidavit said that they are in no position to restrain Dunkeld, the Hayward shareholder which had brought arbitration proceedings against the government, to ensure compliance with the injunctive order, Young pointed out.

Zuniga, she points out, said they had resigned as a precautionary measure from their role of advising Hayward on making charitable donations, and they cannot now ask the court for relief.

The interested parties on the other hand, headed by BCB Holdings, say that one of the bases upon which they seek locus standi is the $41 million arbitration award in favor of the Belize Bank/BCB Holdings, the attorney pointed out.

Young cited their claim that the new amendments would prevent or may prevent the enforcement of the award.

That dispute over the arbitration award has been heard by the Supreme Court and only a decision is pending to say whether the court would deem the $41 million award enforceable, Young furthermore informed.

With respect to the challenge over the Universal Health Services debt obligations with the Belize Bank, which the government had guaranteed — some say illegally — a ruling from the Privy Council is pending. If the Privy Council finds that the loan note that ex-Prime Minister Said Musa signed as Minister of Finance in 2007 is binding, then the arbitration proceedings would recommence.

The interested parties claim to be shareholders in BCB Holdings, said Young; however, she added, there is a clear separation of ownership, and shareholders in a company have no proprietary interest in a company’s assets. The nine interested parties are not entitled to claim for violation of their fundamental rights, she told the court.

She pointed out that even before the amendments in dispute, outgoing Chief Justice Dr. Abdulai Conteh had exercised that power to lay an injunction against Carlisle’s arbitration proceedings back in 2005, though it was later set aside.

Amandala