BELIZE CITY, Tues. June 30, 2020– In the midst of the Dean Barrow administration’s struggle to bolster the economy in the wake of the wreck caused by the COVID-19 pandemic, there is bad news coming out of Belize’s highest court, the Caribbean Court of Justice (CCJ), which ruled that the government’s takeover of two registries was illegal and a breach  of contract.

Not only did the Barrow government lose the case at the CCJ, but the judges were also unsparing in their blistering condemnation of the government’s action and the manner in which it went about acquiring the private companies.

“The omissions by the Government to take any reasonable steps to try and resolve its issues with BISL collaboratively and amicably, together with its unilateral and high-handed actions to take over the Registries were contextually arbitrary, inconsistent with the standards of good governance, in breach of the duty of good faith, contractually unreasonable, fundamentally unfair, an abuse of State power, and therefore, contrary to the rule of law.

“Taken together, these all constitute a serious threat to, and undermining of, fundamental and core constitutional values and principles. They also weaken the integrity of the legal system, especially if the government is permitted to enjoy exemption from its failure to comply with its rule of law obligations in this case … they diminish constitutional faith and public trust, and hence democratic legitimacy,” a summary of the 144-page CCJ judgment said.

The CCJ remitted the case of Belize International Services Limited (BISL) (an Ashcroft Alliance company) versus the Attorney General of Belize, to the Supreme Court, which will have to hold damage assessment hearings.

The genesis of the case lies in legal wrangling over a decision that the People’s United Party government of former Prime Minister Said Musa had made in respect of the two registries. The United Democratic Party government led by Prime Minister Dean Barrow then decided to address the situation by acquiring the two companies — a decision that was based on their conviction that the contracts signed between BISL and the previous government were illegal and not enforceable in court.

After the two BISL companies, the International Merchant Marine Registry of Belize (IMMARBE) and the International Business Companies (IBC), had exercised the option to renew their contract for another 10 years in May 2003, the parties agreed to another extension in 2010 that was set to expire in June 2020.

After the contract was agreed to, the government collected US $1.3 million.

In June 2013, however, the Barrow government took over the two companies forcefully.

BISL began court proceedings against the government in 2015 in the Supreme Court, for damages for breach of contract.

The government successfully defended the claim on the grounds that the extension agreement was unlawful for three reasons. The first was that it was in breach of Financial Orders 1965, because it was not put out to tender; the second was that the executive did not have the power to approve and bind the government to that agreement; and the third ground was that the extension agreement was inconsistent with Section 114 of the Constitution of Belize.

At the Supreme Court, Justice Michelle Arana found that the company did not have an agreement to deposit government’s share of the revenue in the Consolidated Fund, and that the matter of the company was not put out to tender.

Justice Arana ruled that the contract was unconstitutional, illegal and un-enforceable.

BISL appealed the Supreme Court’s decision to the Court of Appeal, but the Court of Appeal dismissed the appeal and upheld the Supreme Court ruling.

When the case was appealed to the CCJ, four CCJ justices found that the appeal must be allowed and the case must be sent back to the Supreme Court to work out compensation. Last Friday, following the House of Representatives meeting, however, Prime Minister Barrow, who is also a senior attorney, remarked, “… whatever judgment comes…sorry, if the judgment goes against us, I am telling you from now: won’t pay, can’t pay. End of story.”

Attorney Eamon Courtnay, S.C. who represented BISL, informed the CCJ about the Prime Minister’s remarks.

Courtenay asked the court to assist his client in collecting because previous cases have shown that the government will likely disregard the court’s ruling.

Deputy Solicitor General Samantha Matute-Tucker represented the government.