BELIZE CITY, Mon. July 25, 2016–The Caribbean Court of Justice (CCJ) is being asked to settle a dispute between the Government of Belize and the former owners of Belize Telemedia Limited (BTL), most notably the Ashcroft-affiliated company, Dunkeld International Investments Limited, over payments made earlier this month towards an arbitration award handed down in favor of the company last month.
Amandala has been reliably informed that the Ashcroft group is demanding US$70 million more than what it had received in US currency. Under the settlement agreement of September 11, 2015, a “restricted portion” would be paid in Belize dollars and spent on projects in Belize, but the “unrestricted portion” would be paid in US dollars entirely for the enjoyment of the Michael Ashcroft group. The Government says that the Ashcroft group is now demanding more for the “unrestricted portion,” than had been agreed.
“Apart from the foreign exchange implications, such a position would also short the Belize dollar portion reserved for the people of Belize,” the Government of Belize (GOB) said today via press release.
“The Alliance has now applied to the Caribbean Court of Justice for an interpretation supporting its contention. But that is a contention which would utterly violate the Trust set up for the people of Belize with the Accommodation Agreement money, and significantly reduce the number of projects to be funded for their benefit,” GOB added.
The Government has previously said, in accordance with sections 4 and 5 of the settlement deed between the parties, that the portion of the award attributed to the accommodation agreement, a concession which was the subject of the dispute in the parties dating back to 1998, would be payable in Belize dollars. Angela Elizabeth Entwistle signed the deed for Dunkeld, as its director, while Prime Minister Dean Barrow signed, for Belize.
Senior Counsel Denys Barrow, attorney for the Government of Belize, explained to our newspaper that at the time that the agreement was reached last September, the Ashcroft group was adamant that the shares valued much more than the arbitration tribunal had recently awarded them, and the expectation was that the basic share value of the company would have amounted to 67%, while the accommodation agreement would have had a value of about 33%. However, it turned out that the tribunal attributed 60% of its award to the concession alone.
The assumption was that the Ashcroft companies would have gotten a higher amount in unrestricted funds that they could take from Belize in US dollars. According to Barrow, they want the full 50% due within 10 business days of the ruling in US dollars, payable to the former shareholders, and they have filed for the CCJ to review the matter.
Financial Secretary Joseph Waight told Amandala that the Government of Belize paid US$29.5 million and BZD$134.9 million in compensation, plus 827,000 British pounds in legal fees and 33,000 Euros in arbitration costs.
According to Waight, the parties disagree on how the arbitration award is to be paid. Waight said that the Government’s understanding is that the portion attributed to the accommodation agreement—amounting to 60% of the award—should be payable in Belize dollars for projects to benefit Belizeans, while the other portion—the 40% for the basic value of the shares without the accommodation agreement—is payable in US dollars.
Either way, the calculations indicate that the portion paid in US dollars amounts to less than 40% of the payment. It actually works out to 30%.
Of note is that about a third of the payments made are for the BTL Employees Trust, a private company controlled by the Ashcroft group whose shares were confiscated by the Government at nationalization. Those shares were purchased through Sunshine Holdings Limited, which still owes the Government and the Belize Social Security Board $20 million, which the deed said remains a liability of the Government of Belize, since it had acquired the company at nationalization.
In last week’s edition of the Amandala, we had reported that a new spat was emerging between the Government of Belize and the Ashcroft group over the compensation payments. In a press release issued on Friday, the Government of Belize confirmed that report, saying that the CCJ had been asked to look into the matter. It also said that it has asked its overseas lawyers to file relevant applications to correct what the Government says were miscalculations by the tribunal: (1) of the applicable exchange rate in determining the conversion between Belize and US dollars, and (2) the interest calculations, which should have taken into account the part payment of $65 million paid last year.
“Both mistakes by the Tribunal prejudiced GOB and resulted overall in larger sums being awarded than were justified,” the release said.
After the parties entered their settlement agreement last September, they informed the CCJ about their agreement, and asked that Dunkeld be listed as a respondent in the case, for the purposes of the settlement agreement. The CCJ later entered a consent order in October, citing the settlement agreement and adding Dunkeld as a party. It also indicated that while it had stayed the matter, it could be called upon to settle disputes arising out of the settlement deed.
Furthermore, the parties also left the door open to pursue foreign arbitration in Miami, under rules of the London Court of International Arbitration.
The payment of the 50% balance of the arbitration award should be settled a year after the arbitration ruling. However, the settlement deed indicates that in the event of a default in payments, the former shareholders could immediately demand payment in full from the Government of Belize.
We asked Waight whether the current dispute over the payments could trigger such a demand. In reply, he told us: “Yes it could, but it has now gone to the CCJ for interpretation and an Order.”
Amandala understands that the CCJ has yet to set a date for hearing the application.