Last week, we took you inside the teleconference hearing that the Caribbean Court of Justice held to resolve the currency fight between the Barrow Administration and the Ashcroft Alliance. The half a billion dollar settlement for BTL is supposed to end the fight over the phone company, but up until this morning, they could not agree on whether the bulk of the settlement was to be paid in Belize dollars or US dollars.
Well, the Caribbean Court of Justice ruled today, and the judgment came out against the Government. The CCJ is telling GOB that it must honor the terms of the settlement agreement as they signed. That's something that the Government is disappointed to have to do because millions of dollars that would have gone to the benefit of Belizeans must now be handed over to the Alliance - in US dollars.
As we've reported, the two sides agreed in principle that the settlement would have a special "carve-out." The way it was supposed to work is that the Ashcroft Alliance would be compensated for the book value of the shares that the Barrow Administration took away from them to gain control of BTL.
Whatever value that the unlawful Accommodation Agreement added to the price of the compensation, that amount would go into a trust to be used for the benefit of the Belizeans. Basically, the Government and the Alliance agreed that to end this saga, the country would have to overpay because of the Accommodation Agreement.
But, instead of all that money going to the Ashcroft Alliance, a percentage would be put aside for the development projects.
To reach to this compromise, the Alliance insisted that whatever value, the Permanent Court of Arbitration arrived at for the BTL shares, they would be paid 50% of that upfront in US dollars. The trouble is that the real value of the shares only turned out to be 40% of the half a billion dollar price tag. This means that the other 60% should, in theory, go to that special carve-out for Belize. But, that's not going to happen because of that written demand of half of the total upfront…so, the Alliance is walking away with 10% more than was agreed in the compromise. And 10% works out to about 50 million Belize Dollars more.
7News was there this morning at that teleconference hearing when the CCJ ruled against the Government. With video provided by the court, here's that moment when the presiding judge explained the reasoning behind the ruling:
Hon. Rolston Nelson - CCJ Judge
"The meaning of the written contract is to be gleaned from the language of the contractual terms, and the court adopts the words of Lord Neuberger in Arnold and Britton, where he said, 'Unilike commercial common sense in the surrounding circumstances, the parties have control over the language they use in the contract.' And again, save perhaps in very unusual cases, the parties must have been specifically focusing on the issue covered by the by the provision when agreeing the wording of that provision. Again, the fact that the contract is badly drafted is no excuse for the court to embark on the exercise of what Lord Neuberger called, 'Searching for - let alone constructing - drafting infelicities' in order to facilitate departure from the natural meaning. Lord Neuberger in that case also emphasize that it is not the function of the court, when interpreting an agreement, to relieve a party of the consequences of his imprudence, or poor advice. Accordingly, when interpreting a contract, the judge should avoid rewriting it in an attempt to assist an unwise party, or to penalize an astute party. I think this is the answer to Mr. Barrow's submission that the court should read words into...Clause 4, to the effect that the enhanced value of the Telemedia shares was to be held in Trust for the Belizean people in Belizean dollars. The court orders the Financial Secretary to pay to Dunkeld, US 50,789,613.44 dollars, and to the Trust, US 16,520,510.54 dollars."
The direct effect of that judgment is that Belize's portion of the settlement deal just got a bit smaller by a several million dollars. After the hearing was over, we got a chance to speak with both sides about the outcome. Here's what they told us outside of court:
Denys Barrow, SC - Attorney for GOB
"There were the two views available, and they decided that their interpretation of the agreement supported the arguments put forward by my good friend, Mr. Courtenay, and therefore, they decided against us. As far as the Court was concerned, it was a matter of interpreting the agreement as it was drafted. They thought that the agreement was badly drafted; that is, of course, a view which has to be respected. They Government fully respects the CCJ's decision, and will obey what the Court has decided. They real effect is that the people of Belize have lost out on a number of millions of dollars which the Government negotiated with Lord Ashcroft's companies, which should have gone for the benefit of the people of Belize. That really is the short of it. The other more immediate consideration is the crunch it puts the country in, as regards the availability of foreign exchange."
Eamon Courtenay, SC - Attorney for Ashcroft Alliance
"You also heard the presiding judge offer to the Government, an opportunity for a stay of execution, or to say that they wanted time to pay. And, that was declined, and they indicated that if they needed time to pay, they would make an application to the CCJ. Listening to that, I am assuming that very shortly, we will receive full payment from the Government, and that is only right because of how long outstanding this matter is. If we do not receive the full amount from the Government, we are, of course, entitled also to come back to court and to say to the court, 'You need to force the Government now to make the payment.' Obviously, that is not in the interest of my clients. It's not in the interest of the Government. It's simply paying the amount that is due, and let's try to move forward."
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