Supreme Court Says GOB Does Not Have To Pay Arbitral Award
The Supreme Court today ruled that the Government of Belize does not have to pay 33.5 million dollars to the Ashcroft Alliance. It's a win for the Barrow Administration, but the Ashcroft Alliance intends to take it to the Court of Appeal, and if there is need, they are determined to appeal all the way to the Caribbean Court of Justice. And Michael Ashcroft himself was right there in the courtroom to hear it! He appeared only mildly disappointed in the courtroom when the decision was handed down.
Viewers may remember the origin of that 33.5 million dollars that the Alliance is trying to collect on. It dates all the way back to 2007 when then Prime Minister Said Musa and then Attorney General Francis Fonseca signed a loan note, using public funds to guarantee the debt for a private hospital, formerly known as Universal Health Services.
It's etched in history as one of the signal events which led to the demise of the Musa Administration. After Musa and Fonseca signed the loan note, without the knowledge of Cabinet and without taking it to parliament, Msua then - again without public disclosure - secretly diverted a Taiwanese grant of 10 million US dollar grant and another 10 million US Dollar grant from Venezuela to pay off the debt.
The bank then loaned that money to the Healthcare Partners Group and sold the hospital for 39 million dollars.
That should have been the end of that transaction, but according to the Bank, they had to return half of what the Government paid to them, and so the settlement fell through.
And so, by their reasoning, the settlement failed, and now they want back their money. The London Court of Arbitration has since agreed with them, and at the end of September last year, the Belize Bank sued the Barrow Administration in the Supreme Court to have the arbitration award of 33 million dollars plus interest be enforced in Belize. That's important because even though the international court ruled in their favor, without an order of the domestic court, the arbitration award cannot be enforced.
After deliberating for over 4 months, Justice Shona Griffith delivered her judgment today. She agreed with the Bank that the money is owed, but because Musa and Fonseca did not disclose the loan note they signed, and because they didn't take it to parliament, the arbitration cannot be enforced.
It's an important win for Government, but it's only round one of a 3-round battle, and when he exited court today, Government's attorney, Denys Barrow granted us an interview. Here's what he had to say:
Denys Barrow, SC - attorney for GOB
"The court said that the executive is basically always entitled to enter into agreements, including loan agreements. The problem is that entering into an agreement, making an agreement and enforcing that agreement are two separate stages. It is therefore why the finance and audit reform act 2005 makes provision that there should be a resolution of the national assembly, approving loans of a certain amount, because implicit in that, is that if the national assembly, which votes the payment of all monies, approves the making of the agreement, then it follows as a matter of course that the national assembly must intend to approved the payment of the obligation which is incurred, but if there has been no parliamentary approval, but simply he making of the agreement by the executive, by the government, then the question of getting paid is a separate question."
What Barrow and Eamon Courtenay, attorney for Belize Bank agree on is that this case is most certainly going to the next highest court in the land, the Court of Appeal. This afternoon, Courtenay spoke with the media at his law office and discussed with us the prospects for success before the panel which will hear the case:
Eamon Courtenay, SC - attorney for Belize Bank
"The government and the Ashcroft Group of Companies have been involved in, for lack of a better word, a war, a legal war and I think it has been going on for over 6 years. So, what has to put in that context, one has to look at the fact that in so far as this particular piece of mitigation is concern, this is round one. If the government had lost, they certainly would have appealed to the court of appeal. So you can expect that we are going to appeal to the court of appeal. And I am fairly certain in predicting that whoever loses in the court of appeal will go to the CCJ. From the perspective of the bank, we have the judgment. Government has won round one and it's on to round two at the court of appeal, so we will certainly appeal it and we know that this matter is not going to be resolved until it gets to the CCJ, so the quicker, the better really. For the bank's perspective, two main plans of the government argument, that is that there was bias in the tribunal and secondly, that bank attempting to double recover was not accepted by the judge. And so the judge's judgment was and you say a very technical issue relating to section 114 of the constitution. This is not the place to argue it or to reargue it. With respect we disagree with the judge, but that's the nature of our business; we put the arguments, the other side put their arguments, the judge analyses it and I have to say that Justice Griffith did a very detail and extensive analysis of the arguments and came down on the side of the government and I think you heard her specifically say that it tip the balance. So, it was a very finely balance argument."
As defendants, the Government of Belize, has been awarded half of their legal costs.