General — 10 June 2017 — by Adele Ramos
Ashcroft group forms new overseas company in bid to collect US$27.5 million from GOB

BELIZE CITY, Thurs. June 8, 2017–There has been almost non-stop litigation between the Barrow administration and the Michael Ashcroft group spanning at least 8 years, and even as the US Court of Appeal yesterday handed down a decision rejecting a request from Belize for the D.C. Circuit Court to rethink its decision made earlier this year to confirm an arbitration award of US$18.5 million in favor of the Belize Bank, that bank and its parent company, Caribbean Investment Holdings Limited (CIHL), announced the formation of a new company, Midway, to which a separate award, now estimated at US$27.5 million in the dispute involving Belize Telemedia Limited (BTL), is to be assigned.

Law360 reported out of Washington, USA, yesterday that the D.C. Circuit had “summarily refused to reconsider its decision affirming the confirmation of an $18.5 million [USD], plus interest, London arbitral award won by [the Belize Bank] against the government of Belize.”

This court case involves a debt guarantee for Universal Health Services Limited, now Belize Healthcare Partners Limited.


Meanwhile, US court rejects Belize petition to reconsider decision on Belize Bank’s US18.5 mil award


As we have previously reported, this is one of four arbitral awards handed down against the Government of Belize, which together total about $130 million. This is in addition to the arbitral award of nearly half-a-billion dollars handed down last year in favor of the Ashcroft group as compensation for the nationalization of BTL.

Whereas the Barrow administration has said it would not pay the former amount of $130 mil, it has committed to paying the latter of over $450 million, with the final payment coming due in about three weeks on June 28, 2017.

Despite numerous attempts by the Government of Belize to get US courts to quash the confirmation of the arbitral awards and to avert collection in foreign jurisdictions against Belize’s foreign assets and particularly against Belize’s foreign reserves, the bank and its parent company, CIHL, are unrelenting in their bid to collect on those awards.

In a release issued today, June 8, CIHL announced the assignment of the arbitral award and US court judgments in respect of a $44 million award handed down in litigation over BTL to a new company, Midway, registered in the Turks and Caicos. The sole reason for the formation of this new company is to pursue collection of the BTL-related award, involving the 2005 settlement deed with favorable tax concessions which the Barrow administration repudiated back in 2008, on coming to office. The Barrow administration nationalized the phone company the following year, triggering separate arbitration proceedings.

Back in September 2015, Prime Minister Dean Barrow announced a settlement with the Ashcroft group, which the Government claimed included a concession that the portion of the award attributable to the disputed agreement (calculated at more than $200 million) would be channeled back into Belize for capital projects. However, the 2015 settlement agreement approved the deduction of expenses by the former shareholders.

A week ago, a letter sent to the Prime Minister and Minister of Finance quoted figures that would leave only about BZ$10 million for projects in Belize, while roughly $190 million is being claimed back in the form of deductible expenses.

The award which the new Ashcroft-related company has now been assigned to collect is a separate value, estimated by attorneys for the litigants at US$27.5 million. The company said that it made the decision to take this route after the Government of Belize enacted legislation this January “designed to criminalize the pursuit of legal action in foreign courts to enforce certain foreign judgments against GOB.”

In its release today, CIHL said, “…shareholders should be aware that there can be no guarantee that Midway will be successful in monetizing the Award and the Judgments.”

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