G.O.B. Must Find US $67 Million for Dunkeld

Sixty-seven million U.S. dollars – that’s how much money the Government of Belize must find to satisfy the first payment of the Belize Telemedia Limited Arbitration Award handed down on June twenty-eighth. The Government originally made partial payment in Belize dollars, to which Dunkeld International Investments and the B.T.L. Employees’ Trust, the former owners of B.T.L., immediately objected. They filed an application in court and last week Tuesday after a hearing, both sides were asked to try to reach compromise. They could not, hence today’s decision. So at long last, is it over? News Five correspondent Aaron Humes attended the judgment and has this report.

Aaron Humes, Reporting

It is now official: Government’s calculated risk a few months ago of paying the second tranche of the B.T.L. Arbitration Award mostly in Belize dollars has backfired, big time. Unable to reach an agreement with the Dunkeld/Employees’ Trust tandem after appearing in court last Tuesday, Belmopan had to come to Port-of-Spain and the Caribbean Court of Justice today and take its medicine by video conference.

Eamon Courtenay

Eamon Courtenay, Attorney for Dunkeld/B.T.L. Employees’ Trust

“We were here last week and the court asked us to go away and try to settle this. Those of you who were in court last week will have gotten the impression, which is the impression that we have, that the Court was minded to fully go with us on this, and therefore, proposals were exchanged between the parties, and I want to underscore the fact that my clients put forward proposals that were flexible, but in keeping with the fact that fifty percent was due and payable. We didn’t reach an agreement, and so the Court has made an order for the full payment of the fifty percent which is about, I believe about sixty-seven million dollars, roughly, in U.S. dollars. You also heard the presiding judge offer to the Government the 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 need time to pay they would make an application to the C.C.J. 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.”

Government’s attorney, Senior Counsel Denys Barrow, says it is a bitter loss, but one the Government must accept:

Denys Barrow

Denys Barrow, Attorney for Government

“As far as the court was concerned, it was a matter of interpreting the agreement as it was drafted. They thought the agreement was badly drafted; that is of course a view which has to be respected. If it were left to me I would say that the agreement was drafted in a way which at the time seemed entirely appropriate, seemed the right way for it to be drafted. Things changed, and as a result the draft which was come up with before things changed, lost, I think, some of its foundation – lost some of its underpinning – and therefore it is now open to this interpretation which the CCJ has come up with. And the Government fully respects the CCJ decision and will obey what the court has decided.”

Financial Secretary Joseph Waight says the Government will dig deep into its reserves to satisfy the court. He explained how the transaction will work.

Joseph Waight

Joseph Waight, Financial Secretary

“It will take a huge dent in our reserves. We do have reserves to cover the payment but then what is left – it will be difficult, it will be difficult.”

Reporter

“So when the Ashcroft Group returns that money, it will mean that the Government will still have to find additional funds, based on the calculations for you to then make that money in U.S. dollars. Does the Government have that money?”

Joseph Waight

“No, the way I think it will work is this: the Belize dollars that we paid will be returned to us – you remember we paid one hundred and thirty-three million Belize dollars in addition to what we paid in U.S.; divide that by two, you come back to about the sixty-six [million] US dollars that the court mentioned, but we would have to find 66 million U.S. dollars out of our reserves, and that’s a big number.”

Ultimately, says Courtenay, Government could not get away from the fact that it had crafted the agreement at a disadvantage to itself.

Eamon Courtenay

“My clients made very clear exactly what it is it expected to get: fifty percent of the final award. There was no qualification to that; that is simple and clear. The Government of Belize, the Prime Minister, signed that agreement, after having an opportunity to review, to revise and to propose changes. That agreement that was signed by the Prime Minister is something the Government committed itself to. Now, as to giving the arbitrators the ability to determine the ratio of the enhanced value compared to the real value of the shares – again, that was a formula that was put to the Prime Minister; the Prime Minister made revisions, he had counsel advising him, and they agreed to the formula. The judges, as you heard them read out their judgment, made it very clear, that the agreement between the parties is that the amount to be paid to the Trust is to come out of the second payment; that is crystal clear. You cannot, after you sign an agreement – things don’t turn out the way you want them to turn out – attempt to renegotiate, attempt to redraft the agreement. And I think the court confirmed that today, and so it is not a matter of being unfair; it is not a matter of my client pulling a fast one; we went into this with all eyes open, and both sides were advised.”

Aaron Humes reporting for News Five.

Courtenay clarified after our interview that because the former owners of B.T.L. had originally bought and paid for the shares in U.S. dollars, they asked for the repayment to be, at least partially, in U.S. dollars. The final arbitral award itself has been reduced by a few million dollars as Government prevailed on the arbitration tribunal that originally heard the case to take into account factors of exchange rate and interest.