The United States Supreme Court has invited US Solicitor General Donald Verrilli to file a brief expressing the federal government’s point of view in a rare case asking the US authorities to move against the assets of a foreign government in fulfillment of an international arbitration award.
That case, involving the Government of Belize, on the one hand, and the Ashcroft Alliance, on the other, is pursuant to a US$19 million award dating back to March 2009, in favor of Belize Telemedia Limited (BTL).
Amandala sources say that within the last two weeks, there has been a decision by the US Federal Supreme Court, which has agreed to hear the Belize case, which, we were told “is either the single or one of two cases which the US Supreme Court says it will hear.” The court is said to be the final authority in the US on the matter.
Of note is that the Ashcroft Alliance had claimed that the London Court of International Arbitration (LCIA) award of US$19 million runs only up to February 27, 2009, and does not reflect any monies the claimant deems may be due after that date.
BTL had assigned the original award to Belize Social Development Limited (BSDL), a British Virgin Islands company, four months before the Barrow administration moved to nationalize the company in August 2009.
Although the Government succeeded in blocking the Ashcroft Alliance from collecting the award on the home front, BSDL filed a claim in the US, seeking enforcement against Belize’s assets in the US. US courts have contended that they do have jurisdiction to hear the matter, citing the New York Convention, which deals with enforcement of foreign arbitral awards. The agreement between the Government and BTL committed dispute settlement to the LCIA.
Official sources indicate that in November 2009, BSDL filed a petition in the United States District Court for the District of Columbia to confirm and enforce the final award pursuant to Section 207 of the Federal Arbitration Act. The District Court granted Belize’s motion, by order dated October 12, 2010, to stay the petition to confirm the award “pending resolution of the parties’ case before the Belize Supreme Court.”
BSDL appealed and in January 2012, U.S. Court of Appeals, D.C. Circuit United States, granted the petition to confirm the award. That court had held that Belize cannot be an adequate forum, because the country’s assets in the U.S., even if none exist, can only be attached by a US court.
The Government of Belize, represented by Juan C. Basombrio, Esq., partner at Dorsey & Whitney LLP, a US firm, now wants a higher court to overturn that decision and to consequently block the enforcement of the award.
Our newspaper notes that the dispute actually has its genesis in the deal which the Government struck with BTL under the Musa administration when it was still Belize Telecommunications Limited. Back in 2005, the administration of Rt. Hon. Said Musa, the former prime minister, cut a deal with BTL to acquire the former assets of Glenn D. Godfrey which were associated with the defunct telecommunications enterprise, Intelco, which had ceased operations in November 2004.
The assets, identified as the Burrell Boom, Santa Cruz and San Ignacio properties, were sold to BTL for BZ$19.2 million, and included in the deal was a guaranteed rate of return for BTL at 15% or tax holidays if the agreed profits were not realized.
The Government continues to be embroiled in a legal dispute over that deal cut over a decade ago, after the succeeding administration took a position that it would not honor the agreements which the Musa administration had made with BTL, which, in its view, was contrary to the public interest.
Belize has indicated that according to the Caribbean Court of Justice (CCJ), agreements such as the accommodation agreement violate separation of power principles.
The accommodation agreements of 2005-2008, under which the former owners of BTL had been claiming guaranteed profits and special exemptions, had been penned, according to Musa, “to get out of this quagmire of lawsuits which were detrimental to the public interest.”
The Belize Supreme Court, in documenting the dispute, noted that the first agreement dated 19th September 2005, dubbed the Government Telecommunications Accommodation Agreement, was made between the then government and BTL.
“Under the agreement, BTL agreed to acquire certain properties by purchase from the government, and in return, the government agreed to afford BTL benefits and undertakings contained in the accommodation agreement,” the court documents in its ruling on case #874 of 2009.
It noted that, “the properties agreed to be acquired were situated at First Boom Junction; Santa Cruz Village; and at San Ignacio, for the total price of BZ $19,200,000.”
Under that deal, the Government agreed that only BTL and Speednet (Smart) would hold individual telecommunications licenses in Belize. (This was after Intelco’s departure.)
It also agreed, among other things, to enable BTL “…to charge its customers and subscribers rates and charges which would enable BTL to achieve a minimum rate of return of 15% per annum” and the Public Utilities Commission was precluded from being able to regulate BTL’s rates.
In a report our newspaper carried in January 2006, we reproduced excerpts of an interview with Musa, who spoke with us about the transfer of properties formerly held by Glenn Godfrey to BTL. Those properties had been held in mortgage securitization transactions that were the subject of a wider probe by the Senate Special Select Committee.
Musa had indicated that DataPro then belonged to BTL—specifically that part of it that had the Intelco assets totaling 14.47 acres.
He had clarified that the BZ$19.2 million asset pool, under which the mortgages were held, were being transferred to BTL and in return BTL assumed the debt payments to the Belize Social Security Board.
Musa had maintained that nothing illegal had happened with respect to the deal, but conceded that it could have been argued “that maybe some bad judgments were made in terms of lending money on that type of security—insecurity, if you like…”
The mortgage transactions surrounding the Glenn Godfrey loans date back to the late 1990s, when they were first held by St. James National Building Society, but were assigned to the SSB in 2000 as a part of the mortgage securitization scheme. The then Solicitor General had contended that since DataPro had defaulted on its US$8.9 million debt, the SSB was entitled to sell the land—even without a court order.Amandala