BELIZE CITY, Thurs. Sept. 29, 2016–The Caribbean Court of Justice (CCJ), Belize’s final appellate court, handed down a decision today ordering Financial Secretary, Joseph Waight to pay the former shareholders of Belize Telemedia Limited (BTL)—Dunkeld International Investments Ltd. and BTL Employees Trust, two companies controlled by British billionaire Michael Ashcroft—a total of US$67.3 million, in the specified US currency.
Eamon Courtenay, SC, attorney for the Ashcroft companies, had told the CCJ last week that his clients have over BZ$130 million they can do nothing with. His clients have been demanding the funds in US currency, which would allow them to repatriate the money from Belize.
“I was hoping for a check by now,” Courtenay told us this evening.
Waight told the press after today’s CCJ session that, “…the Belize dollars [paid to Ashcroft] will have to be returned to us.” Then, the Government would have to find the US$66 million out of the foreign reserves, “and that’s a big number!” he added.
Meanwhile, the Government suggested, via a press release, that it intends to pay the funds in installments. In a statement issued today, the Government said that it is disappointed with the CCJ decision, but it is one that it must accept.
Courtenay told Amandala that if the Government won’t pay immediately, as the court has ordered, the Government needs to engage the former shareholders, and hopefully they can come to an understanding to avoid having to go back to court, which will be another costly endeavor.
“GOB is now determining, together with the Central Bank, the best-case scenario to avoid any withdrawal of too large an amount at any one time from the Central Bank Foreign Reserves. Thereafter, GOB will put that scenario to the CCJ for approval. On that basis, GOB is comfortable that the ruling will cause no shock to Belize’s foreign exchange position,” the Government’s press release said.
Outgoing Central Bank Governor, Glenford Ysaguirre, had signaled via letter to the Financial Secretary after the demand was made to the Government in July, that drawing that volume of funds from Belize’s foreign reserves, when it is faced with mounting demands and declining export earnings, would spell trouble for the Belizean economy.
Ysaguirre told Amandala today that things have gotten even worse after Hurricane Earl hit Belize last month, “and we know that Hurricane Earl impacted some of the export industries like banana and citrus…”
“I don’t know how we will manage [paying those US dollars]. It will tax the reserves,” Ysaguirre told us.
He said that the International Monetary Fund had already warned in their medium-term projection for Belize that the country’s foreign reserves could see a marked decline in 2019-2020, and the removal of US dollars now, said Ysaguirre, would hasten that decline.
In court today, CCJ Justice Rolston Nelson, who presided over the hearings, said that, “…issues as to whether the government has money or foreign exchange … are not relevant!” after he affirmed that the Government must pay the second tranche of the compensation to the Ashcroft companies in US dollars forthwith.
Last September, when Prime Minister and Minister of Finance Dean Barrow announced two months before the general elections that he had reached a compromise with Ashcroft, the Government paid an initial deposit of 72 cents US currency per share, amounting to $65 million.
The matter was then left to a foreign arbitration panel to resolve after the companies invoked the UK Investment Treaty, to which Belize is a party. That panel handed down its decision on June 28, and the Government of Belize was given 10 business days to come up with the second tranche of payments, which it did by the specified date on July 13, paying $29.5 million is US dollars and $134.9 million in Belize dollars in compensation, plus 827,000 British pounds in legal fees and 33,000 Euros in arbitration costs.
However, the Ashcroft group demanded that the portion paid in BZ dollars should be paid in US dollars instead.
Denys Barrow, SC, attorney for the Government of Belize, argued in court that the Government and the former shareholders had agreed that the portion of the award attributed to the accommodation agreement should be paid in Belize dollars and held for the benefit of the people of Belize. Although that figure is 60% of the total award, the way the agreement was drafted; it turns out to be even less than 50%, based on the finding of the CCJ.
Justice Nelson found that what the Government has claimed is not in the written agreement—the settlement deed.
“We have scoured the agreement and haven’t found anything…” he said.
In fact, he declared that according to the agreement, the Ashcroft companies are to receive 50% of the funds, and those payments are not subject to any deductions.
We asked Senior Counsel Barrow what the real effect of the CCJ’s decision is.
“The real effect is that the people of Belize have lost out on a number of millions of dollars which the government negotiated with Lord Ashcroft’s companies should have gone for the benefit of the people of Belize—that really is the short of it. The other more immediate consideration is the crunch it puts the country in as regards the availability of foreign exchange…” he told us.
There is still the question of what portion of the pie would come back to Belizeans.
Courtenay told us that the issue is unresolved. He said that the Dunkeld liabilities—which include legal fees—have to be brought into account and those have not been finalized. The figure, said Courtenay, would have to be deducted from the balance, and the Belize dollar portion left would go to Hayward Charitable Trust for projects in Belize.
However, Courtenay told us that all costs incurred by the BTL Employees Trust and Dunkeld, the two Ashcroft companies, in fighting all these cases following the 2009 nationalization of BTL would be deducted. Today, the CCJ ordered the Government to pay court costs for the Ashcroft companies.
Courtenay said that all parties “went into this with all eyes open.”