This morning, the Caribbean Court of Justice made a decision which opens up the country to international arbitration by the Ashcroft Allied companies.
Viewers may remember that when the Barrow Administration initially nationalized Belize Telemedia Limited, they discovered that in July of 2007, that the company made a loan of 22.5 million dollars from the Belize Bank in Turks and Caicos. They say that they sought legal advice from attorneys who informed them, that to the best of their knowledge, this loan was unlawful null and void, because it was used to purchase shares in the company.
So, the nationalized company acquired those shares, and the parent company of the bank, British Caribbean Bank took the Government of Belize to court.
They also started arbitration at the London International Court of Arbitration, but the Supreme Court of Belize granted injunction which stopped them from continuing.
It was a judgment in the favor of GOB, which has been appealed all the way to the Caribbean Court of Justice.
And today, the CCJ delivered their ruling dismissing the injunction granted by the Supreme Court. Itís a major victory because the Bank can now take the Government to court oversees, putting intense pressure on their ability to finance their defence outside the courts of Belize.
Today, we asked GOBís Attorney, Denys Barrow, about the implications for the country:
Denys Barrow, SC - Attorney for GOB
"The figure I seem to recall, I don't have it before me, I think it's 22.5 million - it's a loan made by BCB to Belize Telemedia Limited, it was made obviously during the period when Ashcroft related directors and companies were incharge of BTL. Since the acquisitiong the new board of BTL have looked at what took place and they have recieved legal advice from a most emminent Caribbean jurist telling them that that loan was an illegal loan because the purpose of that loan is something that the comapnies act prohibits them doing. The significance of it means that the country of Belize will have to respond/defend or deal with arbitration proceedings started by BCB in England, international arbitration proceeding so it is as basic as that. This judgment does not decide anything other than that, an injunction which had been given by the court of appeal in Belize upholding an injunction given by the Supreme court of Belize that that injunction should be set aside and BCB should be allowed to proceed with international arbitration. The government of Belize has taken the view that if BCB is suing them to set aside the compulsory acquisition of BCB's loan note owed by BTL - then go ahead and sue us, we are defending that in Belize but you should not be suing us to set aside the cumpolsury acquisition and at the same time forcing us to defend international arbitration proceedings in which you want compensation for taking away of your property. So you're saying in Belize that the property was not properly taken away, it is not taken away and we want the court to say so. But you're saying in international arbitration that they have taken away my property and we want compensation so this is all the government was interested in, in terms of this particular case."
We also asked him about the situation which can arise if the international court makes a ruling which clashes with the Belizean Courts.
Hereís how he explained the difficulty that GOB would end up in:
Denys Barrow, SC
"The really significant thing for Belize is the confusion that may result. Let us say BCB wins before the international arbitration tribunal and there is an award of compensation - let's say 50 million dollars awarded - the question is, what will the Belize Court of Appeal decide, what will the CCJ decide in relation to that same compulsory acquisition for which the arbitration tribunal has given an award. Suppose the CCJ ultimately decides that the acquisition was lawful, it means that that has a completely different impact from what the arbitration tribunal decides or if the CCJ decides it was unlawful but as it can well do we will allow you the government of Belize to keep the company but you will pay compensation because the question is again, will there be a conflict with what the CCJ decides and with what the arbitration tribunal decides. The question of winning before the arbitration tribunal really is a question of degree that BCB is entitled to compensation if the loan was lawfull, is not doubted by the government of Belize. The GOB is saying if it had been a lawful loan then you would have been entitled to compensation, the same way the GOB is saying as regards to shares which were cumpolsory acquired, the former shareholders are entitled to compensation; the question is to amount is where we differ."
And finally, we asked Barrow about what the tactic is for launching arbitration proceedings in several different courts.
He says that itís a common tactic utilized by wealthy clients:
Denys Barrow, SC
"It is a common tactic in the business and legal world which is to say if somebody has enough money they will outlitigate you so if you were an individual up against a very wealthy business man, then he is able to take you to court in multiple jurisdictions and on multiple cases and there is a very large possibility that you will run out of money and have to settle on his terms. In relation to the Government of Belize, the idea of spending government and the people's money, tightening litigation in Belize - multiple litigation in Belize and as well as international arbitration proceedings is something that puts a damper on the government. The government needs to be conscious that we are spending the tax payers money and we do not want to spending money loosely and unecessarily, so that really is the point."
The Ashcroft Allied companies have already won a major judgment against the Government of Belize at the London International Court of Arbitration.