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GOB Gets Major CCJ Victory #469085
07/27/13 04:41 AM
07/27/13 04:41 AM
Joined: Oct 1999
Posts: 80,387
oregon, spr
Marty Offline OP

Marty  Offline OP
A significant judgment was handed down today by the Caribbean Court of Justice today – and it’s a very major win for the Barrow Administration in its ongoing battle with the Ashcroft Alliance. More than that, it could have far-reaching implications for a long string of tax write-offs, offsets, guarantees, and settlement deeds that the former Prime Minister and Minister of Finance Said Musa gave to the Ashcroft Alliance.

But, before we explain all that, first to today’s judgment – which was delivered by teleconference from the CCJ Headquarters in Port of Spain, Trinidad to the Supreme Court Building in Belize City.

The CCJ declined to enforce an arbitral Award made by The London Court of International Arbitration in favour of the British Caribbean Bank. The Bank had won an arbitral award of $44 Million US dollars plus interest on the strength of a March 2005 settlement deed signed by then Prime Minister Musa and then Attorney General Francis Fonseca. At the time Musa explained that under the Settlement Deed, government agreed to abandon any litigation against the Carlisle Group for the recovery of outstanding business taxes in exchange for the Carlisle Group abandoning its pending litigation related to the BTL buy back.

In March 2005, then PM Musa said that it was a $12 million dollar write off in business tax that the Belize Bank owed, but what Musa didn’t say is that he also wrote off the Bank’s taxes going forward!

When the Barrow Administration was elected it refused to honour the agreement on the basis that only Parliament could approve such a tax write-off.

Well, the CCJ upheld that position; it found that the arbitral Award based on that deed was quote, “illegal, void and contrary to public policy.” Why? Well the court found that quote, “the Deed purported to alter and regulate taxation and under the Belize Constitution…this could only validly be done by parliament.” A press release from the court adds that, quote,

“to allow the Minister of Finance to assume essential law-making functions beyond his constitutional or legislative authority would put democracy at peril. Caribbean courts therefore have an obligation to strike down executive action that undermines the authority of the legislature.”

Today, outside the court, attorney for the Bank Eamon Courtenay explained how the court differed from the London Court of International Arbitration:…

Eamon Courtenay, S.C - Attorney, British Caribbean Bank
"They took a different view and that is that the Minister did not have the power to give that type of tax treatment to the company and because it did not it concluded that the agreement was unlawful and therefore they will not enforce the award that was based on an unlawful agreement, it would be contrary to public policy to do that."

Jules Vasquez
"What's next for your client in terms of the settlement in this particular tax treatment which it is now liable for?"

Eamon Courtenay, S.C
"Well we have to go in and consider the situation, as I said - we have not read the judgment and it will give us pointers as to exactly what they found in terms of the fact etc.; we have to analyze the judgment first."

Today Prime Minister Dean Barrow told us that it vindicates his government’s position on this and many other agreements entered into under the Musa Administration, specifically with the Ashcroft Alliance. Barrow’s government has maintained that the settlement deeds regarding Universal Health Services the Accommodation Agreement and other tax breaks such as the one for IMMARBE had to go to parliament – and they didn’t.

In a formal statement from, PM Barrow has commented that this landmark decision (establishes) that the various ‘settlement deeds’ and ‘accommodation agreements’ signed by the previous Government were repugnant to the Constitution and laws of Belize and could not be enforced. He said that the CCJ decision is a great victory for Belize and the rule of law.

And while that is the considerable upside for government, there is a modest upside for the bank when the court ruled that the Arbitration Act is constitutional – and thus arbitral awards can be enforced in Belize. That factored into the issue of costs where the Court found that “given the Government’s refusal to participate in the arbitration proceedings,” as well as the Bank’s success on the arguments raised on the constitutionality of the Arbitration Ordinance, each party should bear its own costs.

Channel 7

Re: GOB Gets Major CCJ Victory [Re: Marty] #469527
08/04/13 04:54 AM
08/04/13 04:54 AM
Joined: Oct 1999
Posts: 80,387
oregon, spr
Marty Offline OP

Marty  Offline OP

PM On "Universal" Significance Of CCJ Judgment

Last night, 7News showed you the scathing rebuke by the Caribbean Court of Justice in their judgment a week ago on the 44 million-dollar arbitration award from the London Court of Arbitration.

The court refused to enforce the arbitration award in relation to a 2005 settlement deed which former Prime Minister Said Musa and Former Attorney General Francis Fonseca entered into with the Ashcroft-Allied Company, British Caribbean Bank.

They used strong language when describing their interpretation of the deed to mean that former Ministers Musa and Fonseca attempted to assume powers of the legislature which they could not hold as part of the executive.

It is particularly significant to the Prime Minister Dean Barrow who has been on a campaign to resist all the agreements between the 2005 Musa Administration and the Ashcroft Alliance.

Today, we caught up with him at an event in Belmopan, where he explained that this landmark judgment has implications for all the other Caribbean Countries who have the CCJ as their highest court:

Hon. Dean Barrow - Prime Minister of Belize
"It's a huge victory for the Government and for the country, in two ways, the first, and the very practical financial. We're obviously relieved of the burden of paying 44 million dollars. I have no doubt that the Ashcroft Alliance might find some other way to try to collect, but practically speaking, I don't see how they can be successful. It would have put quite a debt in government finances if we'd had to find that money, so that's a huge relief, and that aspect of the victory is very sweet. Far more important though, what the court said about the Judiciary having to act as a break, as a check, on - how they described it - 'a overweening executive, prime ministerial governance', that is, to me, a signal victory not just for our country, but for democracy in the region. I am sure that there are other prime ministers whose countries are part of the CCJ jurisdiction, that will sit up and take notice."

Barrow also explained the implications for the value of compensation in relation to BTL and the former owners, and in relation to the Universal Health Services Loan note which was argued and upheld all the way to the Privy Council:

Prime Minister Dean Barrow
"If we look at the question of the Telemedia acquisition, now we've said - and we're offering any revelation. It is a fact that we took the people's property; we must pay. There has to be compensation. One of the difficulties in paying compensation so far is because they are trying - on the face of it - get the company back. But, even if they had said, 'Okay, we'll live with that; let's talk compensation.' There is this huge difference between the valuation of what we have, of what the company was worth, and the valuation they have. The implications of this judgment for that, part of their valuation - they're at $10.75 or something per share. Part of that is the Accommodation Agreement. Their valuer has been instructed to incorporate in overall valuation what the Accommodation Agreement, and our deprivation, our strike down the agreement means. The CCJ ruling is absolutely clear that things like the Accommodation Agreement, which again, said that you don't have to pay taxes except in accordance with this agreement; you don't have to pay attention to any attention to the Public Utilities Commission; you can ignore the Telecommunications Act - these are the sorts of things the CCJ said absolutely cannot be countenanced. It must then mean that the Accommodation Agreement is - again as I've always said - illegal. And therefore, that aspect of the evaluation which takes into account the worth of the Accommodation Agreement has to fail. So, it means, as far as I'm concerned that right away, you're talking then about compensation being far less than is currently being claimed. Another important one is the U.H.S. where there again has an arbitration award. I have been talking to Lord Ashcroft about the possibility of settling because I've always felt well; there the bank was out of pocket. The bank did lend this money which with interest ends up at being again almost fifty million dollars. But what I've been saying, there was a point in which Government paid off the loan. Half the payment was via the Venezuelan housing money, and so we got that back, and that's when the liability revived, under the guarantee Government had given for the loan. I want to know, how come when the loan was paid off, the hospital and other properties that were collateral for the loan ended up still in the hands of the bank. So, then where does that leave us? It seems to me that based again on what the CCJ says, the guarantee is illegal, or the payments under the guarantee are illegal, and the same argument would now be made. And the Privy Council expressly said now, as to the promissory note, that promissory note arose in consequence of a guarantee, it may well be open in effect, the Privy Council said, for the Government to challenge the promissory note now on a different basis, having to do with the guarantee. 'But', the Privy Council said, 'That's not before us we're not going to get into that.' And now, I am saying, so said, so done. It is open to us - the Privy Council has ruled that it is a promissory note, not a loan note, so that ship has sailed, but whether the promissory note is on the basis of a guarantee that was illegal, is very much a live issue now."

And as we showed you in the judgment, the Court, described the actions of Musa and Fonseca as "malignant tumours that eat away at democracy," concluding, resolutely, "No court can afford to encourage the spread of such cancer."

We asked Barrow about the hit to Fonseca's credibility as the current Leader of the Opposition:

Daniel Ortiz
"It is one thing to hear it from the Prime Minister of the day, you, that then Prime Minister and the Attorney General did certain things which forfeited certain freedoms of the Belizean people, but then it becomes a next thing when the CCJ says - which has implications for the whole Caribbean as well - to make such strong pronouncements. Do you think that this will play into effect with Leader of Opposition's ability to convince the people that he should be elected next term?"

Hon. Dean Barrow
"Well, I would certainly hope so, but I don't know. It will be left to the people, but naturally, from where I stand, this indicts the Leader of the Opposition terribly. You see, for example with the renewal of the Ships Registry, the Leader of Opposition only signed as a witness. This particular document that the CCJ has struck down, he signed substantively. He entered into it. It was entered into by both the Minister of Finance and the Attorney General. I haven't heard either of them comment, but it seems to me that there is not anything that they can say. This, as you put it, is coming from the highest court in the land, the highest court in the Caribbean, and Lord, what has been said, is absolutely damning. It's a terrible indictment, and I would think that in fact, the public is not going to lose sight of the CCJ judgment, and why the CCJ had to be as strong as it was, and what was done by the Leader of the Opposition at the time he was Attorney General. But, Let us see."

Channel 7

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