Barrow must find another US $18.5 million
Today, the United States Supreme Court has decided that it will not review a lower court decision which enforced a US $18.5 million London arbitral award against the administration of Prime Minister Dean Barrow. The Government of Belize was appealing a D.C. Circuit ruling which confirmed that the arbitral award could go forward.
On August 8, Belize filed a petition for writ of certiorari, which orders a lower court to deliver its record in a case so that the higher court may review it. In that petition, Belize argued that the ruling was incorrect because it is not party to the New York Convention, which is a convention that deals with the recognition and enforcement of foreign arbitral awards.
While the US Supreme Court Justices today denied the petition, as is customary, they did not explain their reasoning for this decision.
The matter at hand was regarding the US $18.5 award issued to Belize Bank by a London Court of International Arbitration tribunal following a dispute over a debt guarantee. GoB had appealed the award in the federal district court in Washington.
However, the federal judge ruled in favor of the Belize Bank. In March, another ruling by the D.C. Circuit supported that judgment. The D.C. Circuit denied Belize’s bid for rehearing thereafter.
In its petition, Belize was of the position that the US Courts incorrectly read the New York Convention and the U.S. position on enforcing treaties on nonparty states. According to the petition, Belize, previously known as British Honduras, was a part of the United Kingdom when the New York Convention was ratified. The petition revealed that the ratification was not extended to British Honduras by the U.K.
After Belize became independent and changed its name in 1981, it never ratified the treaty. And so, because of that, Belize’s position was that it should not have been tied to the treaty, Belize argued.
The root of the dispute can be traced back to a 2004 agreement signed by former Prime Minister Said Musa, in which the Government of Belize guaranteed the debt that Universal Health Services Co. had owed the Belize Bank.
According to the bank’s claim, in 2007, GoB entered into a BZ $33 million settlement after UHS couldn’t pay its debt. When GoB failed to make payments, the Belize Bank began its proceedings in the London Court of International Arbitration.
However, those proceedings were terminated in January 2008 after GoB and Belize Bank arrived at a settlement.
Three months later, when the UDP came to power, the bank returned to court after the Barrow administration filed a lawsuit in the Belize Supreme Court to nullify the original loan settlement on the grounds it was simply not valid.
Since then the matter has been a constant legal battle. The Belize Bank won in 2013 when it was awarded BZ $36.9 million, plus legal costs and interest.
Belize’s legal team in this matter is comprised by Juan C. Basombrio, Steven J. Wells and Timothy J. Droske of Dorsey & Whitney LLP, while the Belize Bank’s legal team is comprised by Ryan C. Morris, Dana C. MacGrath and Louis B. Kimmelman of Sidley Austin LLP.