Stake Bank attorney threatens lawsuit over Portico “Definitive Agreement”

by Marco Lopez 

BELIZE CITY, Thurs. June 8, 2023

Brandishing threats of a possible lawsuit, Glenn D. Godfrey and Co. LLP(GDG), who are the attorneys for Stake Bank Enterprise Ltd.’s Port Coral project (the first of three proposed cruise port projects for the Belize District to receive approval and the only project of the three that is at an advanced stage of construction), have called on the Attorney General’s ministry to declare the Definitive Agreement for Portico Enterprises Limited’s Port of Magical Belize project null and void.

Today is the deadline they have set for the AG’s ministry to make that declaration, and according to the law firm, failure to do so “will result in an application to the High Court.” This is one of the many acts of resistance being carried out to quash the Definitive Agreement signed by and between Portico and former Minister Erwin Contreras, who ostensibly signed on behalf of the Government of Belize. The “outlandish” agreement has been called “excessively abusive, atrocious, unconscionable, and preferential treatment.” The most pointed description of the document and the facts surrounding its creation, however, has been the comparison of the agreement to a “pension plan for the boys” by none other than competing cruise port investor, Lord Michael Ashcroft.  

Portico, in a press release issued last Thursday, stated that they “vehemently deny allegations of corruption” regarding the Definitive Agreement. The release was triggered by the Leader of the Opposition, Hon. Moses “Shyne” Barrow’s letter to the Ombudsman calling for an investigation into Prime Minister, Hon. John Briceño for what Barrow describes as a corrupt act in the handling of the Definitive Agreement. 

“It is regrettable that the LOO’s request to the Ombudsman is rife with mendacious, frivolous and defamatory statements,” Portico’s release states. Barrow revealed in an interview last week that the documentation for the lands acquired by Portico for its project site were signed by Investment Ambassador Hisam Diab (said to be a close friend of the Prime Minister) – an allegation that Portico denied in its release. They claim to have acquired in excess of 1,000 acres of land, none belonging to Diab, and say they have no intention to purchase any other property in the vicinity. 

In responding to the offensive by former Attorney General, Michael Peyrefitte, who has condemned the signing of the agreement and adamantly denied the involvement of himself or the UDP Cabinet in the issuance of a green light to the Port of Magical Belize project, Portico doubled down on its suggestion that Peyrefitte was materially involved with the drafting of the Definitive Agreement. Portico mentioned that Peyrefitte’s former law firm, Morales Peyrefitte LLP, was the only firm retained by Portico after its incorporation – thus refuting the LOO’s statement that Courtenay Coye LLP once represented the company.  

“However, let this release set on record that it was the firm of Morales Peyrefitte LLP which drafted and negotiated the Definitive Agreement with the Government,” the release states. That law firm, according to the release, “not only assisted Portico with its applications for various permits and licenses that were required for the project, but also ensured that Portico satisfied all legal requirements upon making such applications.” That firm has since been dissolved, and the law firm of Morales & Co., formed by David Morales was retained, the release claimed 

According to Portico, Morales Peyrefitte LLP was instrumental in advising the Department of the Environment that Stake Bank Enterpises Limited had committed multiple infractions of the terms of the ECP, “including a non-payment of its monitoring fee which was in excess of $800,000.00 at the time.” The release additionally claims that they have been advised that the fee is still outstanding. 

AMANDALA reached out to Stake Bank and their attorneys to get their response to this claim, but have not yet received a reply regarding that matter. A letter from Stake Bank’s attorney to the Office of the Attorney General, however, although not making any reference to that specific accusation, made a pointed call to the Attorney General, Hon. Magali Marin-Young to declare the Port of Magical Definitive Agreement null and void today. In the letter, Glenn D. Godfrey and Co. tells Attorney General Young that they reserve the right to “commence proceedings against you”—thus placing the AG directly within the crossfire of the competing ports. 

Prime Minister Briceño has said that the Definitive Agreement has been referred to the AG Ministry for a “revision” of sorts – even after the public outcry and unconfirmed claims that the AG had already advised the PM, prior to attempts to submit it to Cabinet, that the document was unlawful. Stake Bank’s attorneys claim that they have been instructed that “GOB intends to accept the Port of Magical Belize Definitive Agreement despite its validity being disputed”— and even though such an agreement would reportedly force the government to guarantee exclusivity in access to port-related concessions/exemptions to Port of Magical Belize within the same zone in which Port Coral and the proposed Waterloo project site are located (thus decimating those other ports’ prospects). They point out that “such action is in clear violation of the unambiguous and unequivocal promise and/ assurance” given to Stake Bank in its own Definitive Agreement. On August 25, 2017, the Stake Bank Definitive Agreement was signed, according to the letter. 

Stake Bank Caye is the project site for Port Coral, the only proposed cruise port that is already at an advanced stage of construction. It is located about 11 miles from the proposed site of Port of Magical Belize. As previously alluded to, one provision in the Port of Magical Belize Definitive Agreement bars the development concessions already given to Stake Bank in its own agreement. 

“It is particularly unconscionable and in contravention of the Stake Bank Definitive Agreement to enforce that no third party competing with the Developer shall, within a twenty-five-mile radius, be given any tax benefits or duty concession for a period of twenty-five years from the commencement date,” the letter from Stake Bank’s attorneys emphasizes. That commencement date would be October 1, 2020 – years after the signing of the Stake Bank DA. 

At the conclusion of the letter, the attorneys state that if GoB goes ahead in support of Port of Magical Belize, it would be an act of bad faith and contrary to good administration “as there would be a lack of transparency, fairness, and predictability in the GoB’s administrative decision-making.” 

Of note, the letter from Glenn D. Godfrey and Co. reminded the AG that leave for Judicial Review was granted by former Justice Lisa Shoman in July 2021. A challenge to the decision of the National Environmental Appraisal Committee (NEAC) and the DOE’s decision to grant Environmental Clearance to Portico is thus currently still ongoing. Stake Bank’s attorneys therefore warned, “The GOB should be cautioned that should our Client’s claim be successful, Portico would [not] have the requisite clearance to lawfully operate a port in Belize nor will this condition precedent of the Port of Magical Definitive Agreement have been performed.” 

Notably, an Environmental Clearance Plan must be completed before developers can enter into such an agreement. 

The letter calls the GOB and AG to “govern” themselves “accordingly” in dealing with the request to declare the Portico Definitive Agreement null and void. 

We note that a release issued yesterday by the Office of the Prime Minister announced that AG Magali Marin-Young SC, will leave the office and ministry at the end of June 2023. 

And while Stake Bank Enterprises Limited is pushing the AG to nullify Portico’s Definitive Agreement, the other entity seeking approval for a proposed cruise port project, Port of Belize Ltd. (PBL), has called on the Contractor General (CG), Maria Arthurs, to investigate the Definitive Agreement and former Cabinet Minister, Erwin Contreras. 

The letter, dated June 2, was written by CEO of PBL Ted Peralta, and lays out 10 circumstances that they believe warrant an investigation and that indicate that a corrupt act was committed. The Contractor General is empowered under section 16(1) of the Contractor General Act to launch investigations if warranted. The letter reminded the Contractor General of the functions of her office to monitor public contracts and investigate any abuse involving those contracts. The letter from PBL points to various sections of the Contractor General Act which empower her to launch an investigation into the circumstances of the signing of the Definitive Agreement. 

“We request that you do so as there are objectively reasonable grounds to believe that the circumstances surrounding Minister Contreras’ signing of the Definitive Agreement were excessively abusive and amounted to a corrupt act,” the letter states. 

They point to the statements made by former Prime Minister, Rt. Hon. Dean Barrow, and former Attorney General, Michael Peyrefitte, in which those former GoB ministers assert that the contract is “one-sided” and remained “secret for two and a half years”— an indication of wrongdoing, according to them. The release even pointed to Contreras’s silence on the matter and the fact that he has not given any account of what took place or made any attempt to explain. 

“For these reasons, we respectfully request that you launch an investigation into this most scandalous affair,” the release states. 

They called on the Contractor General to report any wrongdoing to the National Assembly and if need be, to the Director of Public Prosecution during the course of the investigation. The Contractor General is also urged in the letter to work in tandem with the Ombudsman, who already has similar requests from the Port of Belize and the Leader of the Opposition.  

And while calls for investigations and threats of lawsuits over the Portico Definitive Agreement inundate the local news, one competing cruise port investor, Lord Michael Ashcroft, has described the Portico deal as a “pension plan for the boys [government ministers]”. Ashcroft, who due to an infamous accommodation agreement had been able to legally require the country’s government to pay him hundreds of millions of dollars more than the actual value of Belize Telemedia Limited, which he had owned prior to a nationalization of the company, remarked to reporters from the media house that he owns, News5, “And so, my understanding on some of this with the ports, somewhere in all of this is another pension plan for the boys, except I think some of the boys have actually worked out that they are not in on the deal. But let’s see where it goes.” 

Interestingly, the Belize Port Authority in a release this week stated that no license has been applied for or granted to the Port of Magical Belize for the construction and operation of a port. They point out that neither they nor the Minister in charge of Logistics, Hon. Michel Chebat, were consulted in relation to the agreement or the proposed legislation. 

PM Briceño in an interview this week said that Ministers Hon. Chris Coye and Hon. Anthony Mahler have been tasked to come up with a new agreement. 

“I asked Minister Coye, as the Minister of State in my office, to sit with Minister Mahler, as the Minister of Tourism, to come up with a new agreement as to what is it we are prepared to take to the National Assembly to pass into law,” he said. He further claimed, “Portico, or Port Magical, will not get anything more or nothing less than what the UDP government gave Stake Bank and gave Harvest Caye. What is important to point out, is that here, our government has created an investment environment now that a company like Boskalis and Royal Caribbean, two multinational companies that are prepared to invest in a port in Belize, something that is much needed, that is what we need to be celebrating …”