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Ashcroft denied $88 Million dollars Print E-mail
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Thursday, 01 August 2013 00:00

Eamon CourtenayThe Caribbean Court of Justice made a significant ruling against the Ashcroft Alliance on Friday, July 27th denying British Caribbean Holdings (BCB) and the Belize Bank Limited the ability to enforce an Arbitration Award which would have seen the Government pay $44 Million U.S. dollars to the companies. The London Court of Arbitration had awarded $44 million U.S. with interest at a rate of 3.38% compounded annually to BCB and the Belize Bank.


After the award, the companies sought to enforce it with the Supreme Court in Belize ruling that it was enforceable. The Government appealed the decision at the Court of Appeal and the ruling was overturned. Thereafter, the companies sought a ruling by the Caribbean Court of Justice who made a final decision on the matter, ruling that the Settlement Deed which gave rise to the arbitration award was illegal. In the ruling, the judges note that "The idea that the Minister who signed the Deed (or his Government) was attempting, in good faith, to settle a prior dispute is also quite beside the point. Neither a noble motive, as may have been the case, nor an executed Deed excuses or repairs an obvious excess of jurisdiction or serious breach of the fundamental principle of Separation of Powers."

In 2005, the then PUP government through the Prime Minister at the time, Said Musa and the Attorney General, Francis Fonseca entered into a Settlement Deed with the companies where certain tax exemptions, in fact a new taxing regime, was concocted for the two financial institutions extending up to 2020. This was entered into in exchange of the companies not proceeding with litigation against the Government of Belize.

In its ruling, the CCJ noted that "The promises made by the Minister were designed to affect, indeed to alter, the Companies' tax obligations under existing law." The judgment continues: "The Deed... goes on at some length to construct in careful detail a special tax regime reserved for the Companies; a regime that all parties readily acknowledge is at variance with the extant revenue laws of Belize and one which conferred significant benefits on the Companies.” “The promises made by the Minister were thus intended to supplant and supersede all current and future statues enacted by the National Assembly," noted the judgment. This kind of executive authority was deemed by the court to have been abusive and should not be tolerated.
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While that was the position of the CCJ on the legality of the Settlement Deed, the court found that international arbitration awards can be enforced in Belize but those ought to have a legal origin. Speaking at the end of the tele-conference during which the judgment was handed, Attorney for the Claimants, Eamon Courtenay, he expressed disappointment at the ruling. He indicated, however, that litigation continues between the Government of Belize on other fronts.