Supreme Court Awards $11M in Compensation to Butane Gas Companies
On Wednesday, the Supreme Court returned a decision in a protracted lawsuit filed against the Government of Belize, following the passage of legislation that prohibited gas companies from importing butane into the country. The National Liquefied Petroleum Gas Project Act essentially enabled the National Gas Company by restricting other established concerns from bringing in and retailing butane. Several companies immediately banded together and filed as many as five claims against the Barrow administration. Despite a change of government and amendments to that piece of law, the matter remained before the court where it was argued by attorneys Douglas Mendes, Audrey Matura and Jose Alpuche. News Five’s Isani Cayetano reports.
Isani Cayetano, Reporting
When the National Gas Company began commercial operations in May 2020, the Government of Belize mandated that importers who had been trading in liquefied petroleum gas discontinue that aspect of their business. For thirty years, Gas Tomza, Southern Choice Butane, Belize Western Energy Ltd., and Western Gas Company Ltd., had been importing and retailing LPG in the country. That restriction resulted in a long-drawn-out legal battle during which a number of claims were brought against the political authority.
Audrey Matura
Audrey Matura, Attorney-at-law
“May 1st, 2020 was when the importation by my clients stopped officially and thereafter we had also sought an injunction to still allow them to import, but it was not granted. In between from then to November 2021 that was the law, the original law. But on November 16th, 2021, the government amended it. There was a change of government and within a year of them being in office they amended it because the truth is, the new government that came in and their attorneys that were looking at it saw that we would have won that case on all five points.”
Senior Counsel Andrew Marshalleck represents the Briceño administration. He says that the court found the passage of the law that empowered the National Gas Company to be tantamount to a takeover.
Andrew Marshalleck
Andrew Marshalleck, Attorney-at-law
“What it was, was that the constitutionality of the act, the National Liquefied Petroleum Gas Project Act… and its amendment was unconstitutional because… there were a number of different challenges to it but the first was that the act amounted to a compulsory taking of certain goodwill from the claimant companies. They claim [that] they had developed goodwill in engaging historically in the importation of LPG in Belize and that when the act was passed that entire business was taken from them and basically given to the National Gas Company, NGC.”
In her decision, former Chief Justice Michelle Arana awarded compensatory damages of roughly eleven million dollars to the claimants. It’s a significant figure, however, in the context of the lucrative butane industry, the payout is a paltry sum.
Audrey Matura
“Different companies got different things and if you notice that since the decision or before the decision, one of the claimants has really gone bankrupt because their main business was to import. And, at this point, we would have thought that the court would have then, once finding in our favor, ask that we submit the most latest damages, meaning that when we did this case there was a cut off point when we filed that document, but since then the loss continues, even up to today. So we would have thought that we would have gotten an opportunity to submit the most latest amount, especially the company that went bankrupt and has had to close down. They have lost the most, they did not only lose the goodwill and everything but they totally lost their business and ten million doesn’t compensate for that.”
Against the backdrop of approximately ninety million dollars in butane sales last year, notwithstanding government’s stake in NGC, it can be deduced that the damages pale in comparison to what government stands to gain in the long-term.
Andrew Marshalleck
“The annual market, the last market for LPG, I think, was fourteen million gallons of LPG sold and the price for LPG is six dollars and thirty-odd cents per gallon, I believe, so that the annual value of the market is quite significant.”
Isani Cayetano
“Do you believe that, notwithstanding the payout that government has to make in respect of this decision that it is still getting away with something that is worth way more than what it is compensating for?”
Andrew Marshalleck
“I wouldn’t say that, but I don’t know that that analysis has been done. Certainly, ten point eight million dollars is a significant cost, but you would have to weigh that against what was in fact gotten by virtue of the passage of the act.”
Despite a ruling in their favor for one of five points that were raised in the matter, will there be an appeal on the part of the claimants?
Audrey Matura
“Professionally, my opinion would be that yes, we should appeal. But it’s not a decision for me. My clients got the decision yesterday, I told them that they have up to tomorrow to read it and then I will have a meeting with all of them. Remember, it’s four clients, two might decide I want to appeal and two might decide I won’t appeal. So I literally have to get instructions as to what the clients want in terms of appeal.”
Isani Cayetano for News Five.
