BELIZE CITY, Mon. Jan. 16, 2017–The Government of Belize is battling yet another lawsuit in the United States court system, and reports reaching our newsroom indicate that on Friday, it moved the US Court of Appeal in the Eleventh Circuit, with jurisdiction in Georgia, Florida and Alabama, USA, with a petition to dismiss a US$22 million claim filed in the District Court of Florida back in 2012, in a dispute over an agreement to lease equipment from Glenn D. Godfrey’s now defunct Intelco — International Telecommunications Limited.
Incidentally, Belize won the first round of litigation in 2013, when the lower court found that public interest matters favored dismissal of the case, but Godfrey, who had formed a company in Florida, USA, GDG Acquisitions LLC, to pursue the lawsuit, appealed and won in 2014.
The US Court of Appeal in the 11th Circuit vacated the lower court’s ruling and remanded it back to the court for review on the question of jurisdiction, because the appeals court said that the lower court had erred in disagreeing that the proper forum for the litigation is the US.
Of note is that the Master Lease Agreement—which was negotiated by former budget minister of the then People’s United Party administration, Ralph Fonseca with Godfrey in Florida and Washington, DC—had an explicit clause purporting to irrevocably agree that the parties would settle litigation over the contract overseas on US soil and waiving Belize’s sovereign immunity. A dispute arose over contract payments in 2008, the year when Fonseca’s party lost the elections, over the agreement with the Government to rent the equipment from the already defunct company.
The Government had paid in excess of $13 million in rental for the telecommunications network which operated using equipment which Intelco bought in the USA after it borrowed $5 million from the International Bank of Miami. The rental payments were to repay the bank loan. There was a carve-out in the agreement to allow it to roll-over if the Government continued to use the equipment.
In the US lawsuit, GDG claimed that the Government owed $14 million under the lease agreement, and the balance continues to grow each month.
However, the Government, under the administration of Prime Minister Dean Barrow, has contended that the Intelco equipment was defective, and it cut off payments under the lease agreement, which had been extended with a further arrangement under the former administration.
When the matter was litigated in the US courts, the Government moved the district court to dismiss on three grounds: (1) foreign sovereign immunity pursuant to the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602 et seq.; (2) the doctrine of forum non conveniens; and (3) the doctrine of international comity.
The US District Court of Florida ruled that a Belizean forum was available and adequate. In addition, balancing the private factors, the original contract had been made in Belize between Belizean entities, even though rights under the agreement had been assigned to GDG, an American entity, before the suit commenced, the court observed.
It also pointed out that witnesses and documents were more readily accessible in Belize and enforcing a judgment would be easier for a Belizean court.
Godfrey clearly had an option to pursue the case here in Belize, and the court opined that Belize provided an adequate alternate forum to litigate this matter and that the Plaintiff, GDG, could reinstate its case in Belize. However, Godfrey appealed in the US and won a year later. The appeals court said that the lower court abused its discretion.
In its latest petition before the 11th circuit court, the Government contends that Fonseca, as then budget minister, did not have the constitutional authority to cut the deal he did with Godfrey, and it holds the position that as a consequence, the Master Lease Agreement which the Government had with Intelco—signed, sealed and delivered in the USA back in 2002—is void.
(Deputy Financial Secretary Marion Palacio said that the $22 mil award sought is in US dollars.)