Although the court ruled that the loan note and settlement deed are unlawful because they did not get a resolution of the National Assembly as is required by the Finance and Audit Reform Act, the court did rule that the Bank does have legitimate claims against the Government, which means that the GOB lost it's case.

The interpretations from the involved parties make this ruling so interesting because where the Bank obviously wants the GOB to pay back the loan, the GOB concludes that the other payment to the Bank (the $ 10 million Dollars from Taiwan) has to be paid back to them as well.

This story will without a doubt continue...

Originally Posted by Channel5Belize
G.O.B. loses A.C.B case; ordered to pay court costs
The Belize Bank this afternoon reacted to conflicting media reports on a ruling last Thursday by Justice Minnet Hafiz in the Supreme Court against the government in which GOB was ordered to pay the costs of A.C.B. in bringing this case. Last week Justice Hafiz delivered a judgment in the case brought by the A.C.B. challenging the lawfulness of the loan note issued by the GOB as part of a settlement regarding the U.H.S. debt. The Bank said today that the ruling by Justice Hafiz did not grant an order declaring the settlement signed by GOB in March 2007, to be unlawful. According to the Belize Bank, Justice’s Hafiz’s order concerned only the loan note and did not (quote) absolve the government of its obligation to settle the U.H.S. debt owed to the Belize Bank (unquote). Neither did the judgment deem the settlement of the U.H.S. debt in 2008, as part of which the Bank was paid funds from the Taiwanese government, unlawful, says the Bank. The release stressed that Justice Hafiz held that the Bank does have legitimate claims against the Government. Even though Justice Hafiz found that the loan note issued by the government was unlawful she went on to say that the Bank only agreed to enter into the settlement on the basis of representations made by government and that the Bank has claims in respect of these on ongoing arbitration proceedings.

Originally Posted by 7 News Belize
GOB Pressing Belize Bank to Run the $10 million from Taiwan

On Thursday we told you about Justice Minnette Hafiz’s decision on the loan note and settlement deed between the Belize Bank and the Musa administration. Well, tonight both the government and the bank are offering two different interpretations of the judgment, but government is going one step further: it’s demanding the other US$10 million government used the pay off the Universal debt, not the Venezuelan $10 million, the Taiwanese $10 million.

The statement from the Prime Minister’s office contends that Justice Hafiz declared the loan note of March of 2007 unlawful because it did not get a resolution of the National Assembly as is required by the Finance and Audit Reform Act. But more than that, government points to the fact that in May of 2007, the Solicitor General gave the court the undertaking that government would not pay the guarantee until the case was settled. Well, it was just settled on last week Thursday, but US$ 20 million, $10 from Taiwan and $10 million from Venezuela was paid to settle the debt in 2007 and 2008.

Government has gotten back the Venezuelan $10 million and now it’s saying that it also wants back the Taiwanese US$10 million. Why? Because that’s also satisfying the loan note, which– according to the judge – was unlawful in the first place. The government warns that the Belize Bank could face civil and criminal liability by holding unto the Taiwanese $10 million.

But the bank has a different view. In a statement today it correctly states that that while the settlement deed stands- the loan note has indeed been declared unlawful. But in the bank’s opinion, that does not absolve the government of its obligation to settle the UHS debt. The bank says that in her 70 page judgment Justice Hafiz held that the bank does have legitimate claims against the government.

As for the Taiwanese $10 million, the bank says that government will have to go to London if it wants that, because a previous Supreme Court judgment found that arbitration proceedings are the proper forum for any claims concerning those funds to be settled. And as regards the unlawfulness of the loan note, the bank cites the judge’s conclusion that the Belize Bank had only entered into it because government representatives indicated that they had complied with all statutory requirements, including those of the Finance and Audit Reform Act – saying basically that they were misled.

And while government’s release ends by saying it will now pursue the Taiwanese funds, the banks’ release ends by saying that it will continue with arbitration proceedings to recover all funds that it loaned.

Live and let live