Stake Bank’s Port Coral project still under construction
BELIZE CITY, Thurs. Jan. 30, 2025
The High Court has cleared the way for the Government of Belize (GoB) to proceed with its compulsory acquisition of the 23.4-acre Stake Bank Island extension placed in the name of businessman Michael Feinstein in 2021. The extension landlocked the inner portion of the island comprising 16.085 acres bought in 2004, and since the disputed ownership of the extension is in court (Claim 188 of 2024), completion of the Port Coral cruise port project spearheaded by Stake Bank Enterprises Ltd. (SBEL) has been stalled.
Michael Feinstein – Businessman
In order to see construction resume and the project completed for the benefit of the tourism industry, the Government gazetted on August 27, 2024, the first of two notices that are required for a compulsory acquisition of the extension under the Land Acquisition (Public Purposes) Act, Chapter 184 of the Laws of Belize, Revised Edition 2020 (LAPPA). Prime Minister John Briceño had explained that the Government’s intention was to then vest ownership of the extension in SBEL, whose US$62 million debt was bought over by Operaciones Portuarias S.A. de CV (OPSA), a Honduran company. Atlantic Bank had placed SBEL in receivership in March 2024 after the company was accused of defaulting on its loan.
By motion dated September 9, 2024, Feinstein challenged the compulsory acquisition as unconstitutional. He cited violations of sections 3 and 17 of the Belize Constitution — the latter having to do with the protection from the deprivation of property and compensation in a specified and timely manner. On the basis of those portions of the Constitution, Feinstein made the case that the LAPPA is unconstitutional, as it does not set out such provisions regarding time frame and manner of payment. Feinstein also argued that the Government was not acquiring the land for a genuine public purpose, but merely to settle – to the benefit of their opponents—the litigation over the ownership of the extension. As such, they accused the Government of unconstitutionally interfering in the judicial process. They also deemed that the acquisition should have been carried out under the Land Acquisition (Promoters) Act instead. However, on the latter ground, the Government responded that a decision making that point was overturned via a previous appeal, but also, that the Promoters Act contains the same constitutional “difficulties” the Claimants are complaining about. The Judge concurred with a previous Court of Appeal decision in AG v. Bruce (2010) that since there is no clear statutory mandate to choose one law over another, it is left up to the Government to decide which acquisition law to use.
Responding to the other grounds, the Government argued that OPSA indicated to them its financial ability and a willingness to complete the project as long as ownership of the extension is vested in SBEL; and furthermore, that the development of tourism is a genuine public purpose. They provided case precedent in the Caribbean to show that public land had been vested in private ownership for the same purpose.
The case went to trial on December 19 and 20, 2024, and on January 29, 2025, the Judge handed down his decision in favour of the Government. He denied Feinstein’s claim that the intended acquisition was arbitrary, an abuse of power, and in breach of his right to the protection of the law. The Judge referred to Sections 11-16 of the LAPPA which address the appointment by the Minister of Natural Resources of a Board to assess compensation. Section 17 sets out that an award of compensation be made and that it be enforceable as if a judgment or order of the court. Meanwhile, Section 19 outlines the rules for the assessment of compensation based on the value of the land. Payment would then be in cash after a vote by the National Assembly. Justice Goonetilleke therefore deemed that these provisions comply with the Constitution.
In discussing the point about the payment of compensation within a reasonable time, he noted that the original LAPPA at section 32 required that payment be ordered by the Minister in equal annual installments over a period not exceeding 10 years. During a challenge in 1991 (San Jose Farmers Cooperative Society Ltd. v. Attorney General) the section was deemed appropriate, but on appeal, it was ordered struck off entirely. However, no replacement was ordered, as that required an act of parliament that was never effected. The Claimant argued that this constitutes a lacuna which is unconstitutional. Interestingly enough, however, this point had already been unsuccessfully argued in the Best Lines Ltd. v. the Attorney General (2008) case by Senior Counsel Dean Barrow, who now appears as attorney for SBEL – an interested party in this case. The Court in Best Lines found that the mere fact that the government could be compelled to make payment via court order under Section 17 (3) of the LAPPA meant that “The statutory system is such that it denies the Government the indulgence to withhold payment as long as it wished.” In making his own assessment, Justice Goonetilleke explained that “Under the LAPPA, once the Board determines the amount of compensation, the award is filed in the Supreme Court (present High Court) and the award is enforced in the same manner as a judgment of the court.” At paragraph 105, he states, “the ‘payment as soon as reasonably practicable’ occurs when the National Assembly next votes on a budget. This could be a supplementary budget or the next annual budget. That being the case, payment of compensation ought not to take more than a year. This would be payment within a reasonable time.”
The Judge also rejected the Claimant’s argument that the court cannot compel payment in the case of default of payment. He said that if the court orders the Minister of Finance to procure the funds and the process to do this is not engaged, “that would amount not to a legal impossibility, but to a breakdown in the democratic system of governance.”
Finally, on the matter of whether the land is being acquired for a genuine public purpose, Feinstein in an affidavit stated that he had communicated to the receiver that there was an option to lease the extension as long as he was adequately compensated. However, based on the affidavits of the Lands Commissioner and the Minister of Natural Resources, the Judge concluded “it would be a Herculean task to argue that there was no public benefit in the proposed acquisition.” They had referenced the significant contribution of the tourism industry to Belize’s GDP and that despite several proposals, only Stake Bank had reached construction stage in the last 20 years, having obtained all the requisite environmental and regulatory approvals.
Importantly, they emphasized that in exchange for concessions that SBEL continues to receive under the Stake Bank Facility Development Act 2014 and the Stake Bank Cruise Docking Facility Development (Amendment) Act 2017, the Government is expected to receive Cruise Ship Port Development fees from passengers. This is to be collected by SBEL then paid into a government fund for equal apportionment between the two. It was also noted that apart from OPSA, MSC cruise lines has also expressed interest in taking over the project if the circumstances “are opportune.”
In denying the claim, Justice Goonetilleke wrote, “Twenty years is a long time to await the development of a cruise port which is crucial to the economy in that it supports an industry that comprises 1/4th of the GDP. Twenty years is approaching the time lost for a whole generation of the people of Belize, on the assumption that a generation would be twenty-five years. As stated in an ancient Arabian proverb, ‘Four things come not back; the spoken word, the sped arrow, the past life, and the neglected opportunity’. An opportunity exists right here and now with an investor at hand prepared to fund the project which has already commenced but stalled though having all regulatory approvals: That appears to be the basis of the proposed acquisition; to move the project forward without any further delay.” He agreed with the Land Commissioner’s suggestion that the government stands to benefit directly from the revenue generated from the facility and therefore, the wider public would also benefit from an increase in tourism.
Referring to case law, Justice Goonetilleke noted that it would not matter if the Government’s intention is to turn over the land to a private developer, “so long as it benefitted the national economy.” The judge pointed to documents provided by the Claimant himself, including their definitive agreement and business plan, among others that actually support this claim. According to the 54-page decision, the SBEL Business Plan for January 2020 to December 2024 affirmed that “This development will change the way tourism is enjoyed in Belize” and “… The financial projections in this plan are refreshing and the assumptions are very realistic … We view the income projections as conservative [and] are optimistic that the synergy realized from this project will be more significant and will lead to overwhelming success for the country and Belizeans as a whole”. The Definitive Agreement outlined that the Government acknowledged the development “will provide a meaningful stimulus to the wider economy.”
Expressing disappointment, the Feinstein Group in a release today stated that their attorneys, Senior Counsel Godfrey Smith, Hector Guerra, William Lindo and Edgar Lord, have been instructed to immediately file an appeal. The Group says it views the decision as a temporary setback, but is confident that its case will succeed on appeal, and has been cognizant that this would have been “a long and difficult fight.” The Group affirms that it will “use all resources at its disposal to defend itself and expose the wrongdoing of the government, wherever it may lead.”
Speaking on behalf of his client, OPSA, Senior Counsel Eamon Courtenay stated after the ruling that they will wait and see if the Minister of Natural Resources, after consulting the Attorney General, will have the second notice of acquisition gazette, now that he is at liberty to proceed. He explained that the Minister is free to move forward with the acquisition unless the claimants seek a stay of the judgment or ask the Court of Appeal to suspend its effect.
Feinstein has been ordered to pay costs to the respondents.
The representatives for the Government were Senior Counsel Magali Marin-Young, Senior Counsel Rishi P. Das, Jerome Rajcoomar, Assistant Solicitor General Samantha Matute, and Crown Counsel Jhawn Graham.
Senior Counsel Dean Barrow was joined by Agassi Finnegan in representation of SBEL.