PORT OF SPAIN, Trinidad, Wed. Mar. 26, 2025

During two days, the Caribbean Court of Justice (CCJ) this week heard the appeal and cross appeal for the constitutional challenge by four former importers of butane/LPG regarding a 2019 regulatory framework introduced by the Government of Belize (GoB) which paved the way for the monopoly, National Gas Company Limited (NGCL). The companies were prevented from importing the product, but even after a law change in 2021 (done while the matter was already before the court), the companies felt the new requirement of having to build a storage facility of a minimum 1.5 million US gallons capacity to be able to import was unfair. 

The respondents, four privately owned companies originating in Mexico and Central America, are being represented by Senior Counsel Douglas Mendez, Senior Counsel Godfrey Smith, Luke Hamel-Smith and Hector Guerra. The Attorney General is represented by Senior Counsel Eamon Courtenay along with Assistant Solicitor General Samantha Matute and Iliana Swift; while the Controller of Supplies and the Minister of Economic Development are being represented by King’s Counsel Edward Fitzgerald and senior counsels Andrew Marshalleck and Angeline Welch.

In September 2022, Supreme Court Justice Michelle Arana handed down an award of BZ$10,896,619.25 in favour of Gas Tomza Ltd., Western Gas Co. Ltd., Southern Choice Butane Ltd. and Belize Western Energy Ltd. for losses suffered due to the regulatory changes. 

The Government appealed the decision, and the Court of Appeal ruled that the Government had infringed the constitutional right of the companies to work and their right to property. This is now being appealed by the Government at the CCJ. Meanwhile, in their cross appeal, the companies are challenging the ruling of the Court of Appeal which did not find favour with their claims that their rights to freedom of association and equal treatment were violated.

The Court of Appeal ruled that the companies’ right to work was breached due to the storage facility requirement that they deemed impossible to meet. The Court of Appeal struck down that part of the law that imposed the inordinately high storage requirement.”As it relates to the award of damages, the Court of Appeal remitted the case back to the High Court for a new assessment, citing that the figure was not pleaded or proved. The Court of Appeal also upheld the High Court decision not to award vindicatory damages.

Senior Counsel Courtenay opened the appeal on Tuesday by asking the court to consider certain realities at the time that the Government made the move to reform the sector via a policy decision of Cabinet that was then turned into legislation. He shared that the judgment of the CCJ in this case will be a landmark and defining decision, given that it will set out the contours of the Government’s power to regulate a sector of the economy. He is asking the Court to allow the Government’s appeal and dismiss the respondents’ cross appeal.

Referring to the context that existed at the time that the then Barrow Administration introduced a new regulatory regime in the butane industry, Courtenay stated, “It was the intent of the Government to liberate the sector from the Saragoza brothers’ oligopoly.” He further explained that the government sought to address realities on the ground that caused insecurity in the supply of LPG to Belize, “that caused transfer pricing in that sector, that caused questions about the quality of LPG sold to consumers, and indeed, there are serious problems about smuggling.” He affirmed that their claims were substantiated in evidence.

Rejecting the insinuation that the government was acting in bad faith “in seeking to put the respondents out of business,” Courtenay indicated that the 2021 amendment proves this was not the case, and that the government was merely seeking to move transportation of the product from land to sea. He added that the amendment provided for the companies to import through the NGCL facility by negotiating a deal or buying the product from NGCL.

The grounds for cross appeal by the companies are that the reforms introduced were unnecessary, that they lost profits and business as a result and that there was loss of goodwill. Welch explained that goodwill refers to the attractiveness of a business to consumers based on reputation, and she and Courtenay rebutted that the companies provided no evidence of their claims. They further argued that the businesses continue their operations and goodwill is assessed on the loss of an entire business, not on the loss of customers. Welch affirmed that proving the loss of goodwill requires expert analysis which was not provided by the companies. Courtenay told the court that if the argument of deprivation of goodwill is accepted, the loss would have been marginal, but he insisted that it was not proven.

Courtenay also put forward the fundamental principle that in the case of regulatory legislation which is of generalized application, courts will not find that there is the need for compensation.  

Senior Counsel Mendez argued that the legislation is discriminatory, given that the NGCL is guaranteed fiscal incentives, whereas a company who submits an investment proposal seeking such fiscal incentives is not guaranteed to be approved. The effect was that there was not a level playing field, he declared. Mendez remarked that the Government, via the legislation, was intending to keep everyone out to maintain the monopoly. He concluded, “If that is a proper legislative goal, then you have to pay the price of compensating people for the property that you take.” He described the result as being that NGCL took over his clients’ customers.

Arguments concluded today and the CCJ has reserved its judgment.