On Monday's news, we brought you coverage of the Caribbean Court of Justice's teleconference hearing trying to resolve the latest fight between the Barrow Government and the Ashcroft Alliance over BTL. They can't agree on whether the half a billion dollar settlement should be paid in US Dollars, or Belizean dollars.
Now, while a fight over currency may appear trivial, it is important because the currency determines who gets a bigger piece of the pie for the final settlement - and it also determines how easily government can pay it.
Now, to understand it all - we have to back to the infamous Accommodation Agreement, signed by the then Musa Administration, which ultimately triggered the nationalization of BTL, and that led to the prolonged legal battle between the Ashcroft Alliance and the Barrow administration. Well, to try to settle it, they both agreed to let the arbitrators at the Permanent Council on Arbitration determine the value of the shares that the Government took away from the Alliance. It was expected that the Accommodation Agreement would drive up the value of the final settlement figures, and so, the two sides agreed that there would be a separation of the value between the book value of the, and the additional value derived from the Accommodation Agreement.
The Government and the Alliance settled on the principle that whatever value was assessed for that infamous agreement, the real share price would be paid to the Alliance and the other enhanced value would go into a fund for projects benefiting the Belizean people.
Seems simple enough, but the problem is that nobody anticipated that the Accommodation Agreement portion of the settlement would take up the bulk of the BTL bill. The arbitrators assessed it at 60% of the final 500 million-dollar price tag. The problem was compounded because the drafting of the Settlement Agreement, as laid out in the 2015 Acquisition (Settlement) Act, was not written to account for that. On the Ashcroft side, the document is being interpreted with the commitment that the Government gave. Seen here in Subclause 4.1 (b.1) of the Act's Schedule, the Government agreed that the first partial payment that Dunkeld International, an Ashcroft-Allied company, would receive is 50% of the entire settlement in US dollars, 10 days after it is finalized. That amount goes directly to the Alliance.
The other part of the settlement, spelt out in Subclause 4.2, is the Government's pitch as to why the huge settlement isn't all that bad. It says that the Accommodation Agreement portion of the settlement should be designated as a "Dunkeld Restricted Amount". That amount, from the Barrow Government's perspective, should directly into the Hayward Charitable Trust, to be used for the benefit of the Belizean people.
So, why is all this important? Well, the Ashcroft Alliance says that they should have been paid 50%, or 75 Million dollars in US Currency. But, the arbitrators assessed that 60% of the award is due to the Accommodation Agreement. So, in principle, the Ashcroft Alliance should only get 40%, as the real share value. So, that's the big dispute?
Well, the Alliance wants their 50% upfront, while the Government says that they are only entitled to 40%. No one is sure who's right, since the Settlement Agreement allows for both interpretations. But with the wording as it is, each side is saying that they should get their share first.
Yesterday, we challenged the Prime Minister on the convoluted wording of the agreement, which now causes this problem, and on the fact that his brother was unable to successfully convince the CCJ judges of the Government's position. He told us that his reports say otherwise, and so, we've put together excerpts of the hearing for you to decide how it went. The CCJ's video recording had some audio issues, and so we've assisted you with subtitles; here's that exchange between the attorneys and the CCJ judges:
Eamon Courtenay, SC - Attorney for Ashcroft Alliance
"The parties agreed that the Arbitrators would determine the compensation amount, but also will attribute a value to the shares, and a value to the Accommodation Agreement. There is no dispute about that. What the applicants did was to make very clear, and to make an express term of the agreement that whatever amount the arbitrators reach as to the value, and whatever amount they attribute to the Accommodation Agreement, and to the shares, 50% of the total award is to be paid to them in US dollars. Both parties took a risk as to the attribution of the amount to the Accommodation Agreement. There is no provision in this agreement that says all of enhanced value is to go to the trust."
Denys Barrow, SC - Attorney for GOB
"The parties agreed that out of that 175 million US, that portion representing the value attributed to the Accommodation Agreement is to be held by the owners for the benefit of the people of Belize."
Justice Rolston Nelson - CCJ Judge
"But, the drafting is bad, and that doesn't mean that we should be misled."
Denys Barrow
"It is 40-60."
Justice Rolston Nelson - CCJ Judge
"It doesn't say that in the agreement."
Denys Barrow
"No, well exactly, and it doesn't either that you are entitled to any of the 60% for your benefit. Payment in installments does not alter - notwithstanding that it is a bit convoluted - does not alter that proposition, which I think remains as the meat - as the central thrust of this clause 4."
Justice Rolston Nelson - CCJ Judge
"Mr. Barrow... I would take a lot of persuasion..."
Daniel Ortiz, 7News
"The Government is on very thin footing when it comes to demanding that."
Rt. Hon. Dean Barrow - Prime Minister
"Listen, I wasn't there, so I didn't hear what the court said, but that's not the way I got the report. So, I am afraid I am not in a position to comment on your understanding, since it doesn't accord with I was told. I would only say this, that we clearly take the position that there is no doubt at all about the agreement making clear that the Accommodation Agreement portion of the award is to come back to Belize for the benefit of the Belizean people."
As we told you, the CCJ judges have suggested that they make their best attempts to settle this outside of court. They have until next week Thursday, and if they cannot agree on a resolution, the Court will decide on which interpretation is the correct one based on the wording of the settlement agreement.
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