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CCJ hears Belize Bank appeal for BZ$43 mil LCIA arbitration award against GOB

“This is an unusual case where a Prime Minister, by his signature, has purported to create a special tax regime:” Michael Young, SC, tells the CCJ

The Caribbean Court of Justice (CCJ), seated in Trinidad and Tobago, today heard the appeal lodged by BCB Holdings Ltd. and The Belize Bank Ltd. against the Attorney General of Belize, in relation to the BZ$43 million arbitration award granted by the London Court of International Arbitration (LCIA) back in 2009.

The judgement will be delivered at a later date.

Michael Young, SC, appeared today for the Government of Belize, while Eamon Courtenay, SC, and Ashanti Arthurs-Martin, appeared for the appellants. Both sides had foreign attorneys as a part of their legal team.

The dispute dates back to October 2008 and it originates out of a settlement deed which set out tax concessions that the then administration of Said Musa made with the parties, in getting them to abandon litigation by the Michael Ashcroft group against the Government over shares in Belize Telemedia Limited (formerly Belize Telecommunications Limited).

The Barrow administration had taken the position that it would not attend arbitration proceedings, but would resist all attempts to have that award enforced in Belize.

At the end of its hearings, the LCIA awarded damages in the amount of BZ$40.8 million, reimbursement of the respondents’ costs of the arbitration in the amount of £206,248.40 and legal, professional and other arbitration costs in the amount of BZ$2,960,735.69.

Furthermore, interest at an annual rate of 3.38% compounded annually on all sums was also awarded.

The very next day, the claimants sought enforcement of the LCIA award through the Belize courts. The BCB and Belize Bank won when they appeared before Supreme Court Justice John Muria, who ruled in 2010 that GOB had to pay the LCIA arbitration award.

The Government of Belize then appealed Muria’s decision, and the Court of Appeal ruled in favor of the Government, saying it didn’t have to pay.

BCB and The Belize Bank then moved to challenge the Court of Appeal decision at the ultimate appellate court for Belize – the CCJ.

One of Government’s main arguments against paying the award is that the arbitration award is not enforceable, because the convention under which the parties are trying to seek execution does not apply to Belize.

The Court of Appeal had ruled last August that, “It is clear that since the New York Convention does not apply to Belize at the level of international law either by express consent or the operation of law, there is no legal obligation on the part of Belize to recognize and enforce domestically.”

At the CCJ today, Courtenay said: “The battle has been fought and won before the arbitrators; it is now time for enforcement.”

He also said that it was the Government that opted not to defend itself in arbitration proceedings, so it should not try to use the CCJ to litigate the contract.

“They are, in fact, inviting this court to perform an appellate function. That is bad in law,” said Courtenay.

Attorney for the Government, Michael Young, said the appellants knew very well that any such tax concession would have to be approved by Parliament—which was not done.

Young affirmed that the enforcement of the arbitral award is contrary to public policy.

“This is an unusual case where a Prime Minister, by his signature, has purported to create a special tax regime,” Young told the court.

Courtenay restated that the settlement deed was signed by Government, although it was done by a previous administration, and the Government is bound by that agreement.

He also told the court that his clients have paid the taxes in question.

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