Attorneys for British Caribbean, BEL Employees’ Trust and Fortis attack nationalizations, Eighth Amendment

BELIZE CITY, Wed. Oct. 10, 2012

The Court of Appeal of Belize, after three days of oral argument to open its last session for 2012, is effectively unable to render a decision at this time on Civil Appeals 18, 19, and 21 of 2012 between, respectively, the Attorney General and Minister of Public Utilities, Information and Broadcasting and British Caribbean Bank Limited (18); Dean Boyce and the BTL Employees’ Trust (19); and between Fortis Energy International (Belize) Inc. and the Attorney General and Minister of Public Utilities (21).

As the case resumed on Tuesday morning, Lord Peter Goldsmith, QC, representing the Trust, continued to assail the method and manner of the Government’s re-acquisition of Belize Telemedia Limited (BTL) in July of 2011 and subsequent attempt with the Eighth Amendment to the Constitution to make that acquisition and the almost simultaneous acquisition of Belize Electricity Limited (BEL) from Fortis beyond court challenge.

The reality, as argued by Lord Goldsmith, Queen’s Counsel Nigel Pleming and Senior Counsel Eamon Courtenay in turn over Tuesday and Wednesday, is that the Government has failed to establish a satisfactory public purpose for the acquisitions, and attempted to amend legislation which had already been ruled dead and void by the Court of Appeal in the case of Telemedia earlier in 2011 with regard to the 2009 acquisition.

Lord Goldsmith in argument pointed out that while the Eighth Amendment is retrospective in terms of its effect, the 2011 Acquisition Act and Order for BTL property, including the debt owed to the British Caribbean Bank, are not, because they are attached to the original legislation.

He cited a number of legal authorities to advance the point that the Government is obliged to respect the separation of powers and the rule of law as an unwritten principle in the Constitution, and in the case of his clients, they failed to do this.

He urged the court to look carefully at whether the Government removed the Constitutional protections available to applicants in order to enforce the BTL Order with regard to future court challenges and the effect of the 8th Amendment, if any.

Answering the charge made on Monday by the Government’s attorney, Denys Barrow SC, that legislatures in the past, specifically Trinidad and Tobago and Guyana, had completely repealed their Constitutions in pursuance of altering them, Pleming pointed out that in those cases there was public participation by means of a referendum (Guyana) and public consultation and a Constitutional Convention (Trinidad), and more importantly, the new legislation still recognized the unwritten principles of separation of powers and rule of law among others.

Pleming also stressed that the Bank has not been affected by the declared public purposes of the Government in the 2011 Acquisition Act and Order, but has been affected by the Government’s delay in agreeing to proper compensation in a certain time.

The National Assembly, he stated, had become a “super-final Court of Appeal” which the Government used to override the Court’s June 2011 decision voiding the 2009 acquisition.

Denys Barrow rose briefly in reply on Wednesday afternoon, urging the court to consider the “full support” given by church organizations the Evangelical Association of Churches and Belize Council of Churches to the proposal after ensuring amendments that removed explicit language against court challenge, though he noted that that was ultimately “irrelevant” to proceedings here.

It was “incorrect, improper legal procedure,” said Barrow, not a failure to define public purpose or compensate the former owners that was the basis for the failure of the 2009 acquisition and the second attempt in 2011.

Late in the evening, Courtenay argued the Fortis case, saying that the “single purpose – special measure” of the BTL Acts and BEL Act was directed specifically at the parties in the case and Michael Ashcroft in particular, and no other.

With regard to his own clients, Fortis, Courtenay said that while BEL under Fortis was recently having “some financial problems” and so sought Government assistance to increase an earlier letter of credit to Mexican providers Comision Federal de Electricidad (CFE) to the end of June, the company had expected to buy cheaper electricity from BECOL (Belize Electric Company Limited), then and now owned by Fortis.

BECOL owns the hydro-electric dams in the Cayo District (Mollejon, Chalillo and Vaca), which typically run better in the rainy season.

The Public Utilities Commission (PUC) had previously refused a rate increase requested by BEL after the United Democratic Party (UDP) won the election in 2008 and then 2012, campaigning on reduction of utility rates, including electricity. Government had also raised business tax to 6% on the company from 1.75% (then reduced it after the takeover) and the PUC reverted the regime for rate management to an earlier one, said Courtenay in court.

Fearing CFE cutting off power to the country, he continued, Government pre-paid its electricity bill and asked BEL to ask its owners if they were willing to sell the power company. Told that Fortis would consider it if the company could get its rate increase, GOB refused to negotiate and moved to acquire the company just four days before the Court of Appeal ruled the Telemedia 2009 acquisition unconstitutional.

But according to Courtenay, the stated public purpose, “to remove the risk of [losing] a continuous supply of electricity,” had already been fulfilled by Government’s payment and there were other means (the increase in credit, negotiations for shares, or the PUC temporarily taking over under the Electricity Act) by which the problem could have been handled. Only Fortis lost its shares; Belizean owners were left alone, Courtenay said.

GOB deferred the question of compensation to the courts and overall reacted “disproportionately” to the perceived problem, said Courtenay. The statute was patterned from the BTL Act and, Courtenay charged, suffered from the same defects.

In a brief reply, Barrow acknowledged the defects in the legislation for the takeover, which he said had not had the benefit of the Court’s determination, but said that Government acted because the company “was in deep trouble” and Fortis was “ready to sell.”

After court concluded this evening, Courtenay told reporters that Fortis was going to court next week in an “emergency application” following developments this week with regard to the Social Security Board (SSB) investing $15 million in company debentures.

In related news, on Tuesday afternoon, Pleming had asked the Court of Appeal to grant leave to appeal Monday’s decision to keep Justice Samuel Awich on the panel deciding the case, and this was granted.

Initially asking for the entire proceedings to be stayed, the (Ashcroft) Alliance team decided on the latter course of going to the Caribbean Court of Justice (CCJ) and suspending the Court of Appeal’s decision until the matter could be heard at the CCJ, which Courtenay said tonight would be “on an expedited basis.”

It is a matter, Barrow told reporters on Tuesday, of the Alliance wanting a panel free of Samuel Awich, but there are only four Court of Appeal Justices presently, the fourth being Justice Dennis Morrison.

Courtenay denied any attempt by the Alliance to interfere with the Court’s decision of who would sit on the panel or creating the circumstances that led to events this week, insisting that there was an “appearance of bias” on Justice Awich’s part that made him untenable to them. He added that it was “not our fault” if the entire matter got voided as a result of the CCJ’s decision, whenever it comes.