BELIZE CITY, Mon. Jan. 9, 2017–Belize has reportedly lost its US$19 million litigation battle with Belize Social Development Limited (BSDL)—an Ashcroft company which was created by the Belize Telemedia Limited (BTL) while under the control of Brutish billionaire Michael Ashcroft to receive the proceeds of an arbitration award handed down months before the nationalization by the Government of Belize.
A report appearing in Law360, based in New York, reported that the US Supreme Court said today “that it would not take up Belize’s challenge to enforce a 38 million Belize dollar ($19 million) arbitral award to a telecommunications company.”
Financial Secretary Joseph Waight has told our newspaper that the amount sought is now almost double the original award, at roughly $75 million, with interest.
We asked Denys Barrow, SC, counsel for the Government, what the implications of the US court’s decision are, and he told us that the decision means that the claimant which had filed suit in the US against the Government of Belize is able to enforce the award in the US against any property of the Government of Belize that is available for enforcement; however, he said that the asset would have to be a commercial asset – and to his mind, no such asset is available in the US for BSDL to claim.
If BSDL wants to pursue the matter in Belize, it would have to petition domestic courts, presumably under the Crown Proceedings Act, asking the court to issue an order to satisfy the award, he furthermore explained.
However, Barrow pointed to a decision previously handed down by the Caribbean Court of Justice (CCJ), against the enforcement of the award in our jurisdiction, since it viewed the arrangements under which the former owners of BTL claimed the award to be against the public interest.
In its petition filed in December 2015, the Government noted that the CCJ had refused to enforce a parallel award on public policy grounds as being “repugnant to the established legal order of Belize,” “unconstitutional, void and completely contrary to public policy,” and against “the foundations upon which the rule of law and democracy are constructed throughout the Caribbean.”
“Belize told the high court in its December 2015 petition that the justices needed to resolve a split between the D.C. Circuit and the Second Circuit as to whether an enforcement action can be dismissed on forum non conveniens grounds — or that a more convenient forum exists elsewhere. In this case, that would mean in Belize…,” the report by Law360 said.
Just over a month ago, on December 7, the Office of the Solicitor General in the United States, which had been asked to weigh in on the matter, entered an opinion with the US High Court contending that the court should not hear Belize’s petition, in which it was asking the US court to refuse the enforcement of the award for BZ$38.7 million in favor of BSDL.
The amicus curiae brief filed by the Office of the Solicitor General of the USA last month claimed, despite the CCJ’s ruling, that Belize’s argument that Belizean courts were an acceptable alternative forum for enforcing the award was invalid.
The Government of Belize had filed a petition with the US Supreme Court in the hope that it would reverse the decisions previously made by the District Court of Columbia and the Court of Appeals for the District of Columbia Circuit, which had upheld a ruling against the Government of Belize, agreeing that the arbitration award could be enforced—which means the seizure of Belize’s assets in the United States.
However, the Financial Secretary, who was not available today for comment, had told us when the issue came up last month that the Government of Belize has received legal advice both at home and overseas that there are no assets in the US to attach. Belize’s foreign reserves are not attachable, the Government of Belize maintains.
There are other outstanding arbitral awards which the Government of Belize has been fighting off. They include a $37 million award emanating from litigation over the Universal Health Services $33 mil debt guarantee and a $44 million award resulting from a settlement deed between the Musa administration and the BCB Holdings/Belize Bank linked to the longstanding telecommunications dispute.
For the most part, the arbitration awards, handed down by the London Court of International Arbitration, are rooted in the “illegal agreements made with the last government,” Waight has said.
Earlier this year, the Government of Belize lost its arbitration battle over the acquisition of Belize Telemedia Limited—a loss which left the Government and people of Belize with a tab of over half a billion dollars—with almost two-thirds of the award being the estimated value of the accommodation agreement, which included tax perks and other concessions, and not for the core value of the company’s shares.
This July, the Government of Belize will have to pay the final tranche of $180 million to the former owners of BTL, to pay the half-a-billion dollar tab fixed by a foreign arbitration panel to settle compensation for the nationalization of BTL.