Belize’s Court of Appeal has reversed a USD40 million damages claim against the Belizean government lodged by the Michael Ashcroft group of companies, which controlled Belize Telemedia Limited (formerly Belize Telecommunications Limited) until its re-nationalisation in August 2009. As reported by Belizean newspaper Amandala, the most recent appeal ruling reverses a Belize Supreme Court judgment of December 2010 which upheld the damages awarded by the London Court of International Arbitration to Lord Ashcroft’s group company BCB Holdings and its subsidiary Belize Bank Limited (now British Caribbean Bank). The appeal court agreed with the government’s argument that the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, under which the Ashcroft group sought foreign arbitration, does not apply to Belize. The case may now be taken to a higher court, the Caribbean Court of Justice.
TeleGeography’s GlobalComms Database notes that the USD40 million damages claim does not stem directly from BTL’s sudden re-nationalisation in 2009, but from the premature scrapping of a private-public financial agreement the previous year. After the government of the United Democratic Party (UDP) replaced the People’s United Party (PUP) administration in February 2008, the UDP refused to comply with the ‘Accommodation Agreement’ struck between the PUP cabinet and private BTL shareholders controlled by the UK’s Lord Ashcroft, which it considered economically harmful to the country. The Agreement guaranteed Ashcroft’s interests a minimum 15% rate of return from BTL, allowing the operator a tax holiday when the margin was lower, whilst preventing the government from regulating BTL’s tariffs, introducing new competitors, altering BTL’s licence or ordering it to interconnect with other service providers such as ISPs. Had it remained in place the Agreement also bound all government-related bodies to use BTL’s services exclusively at pre-arranged rates until 2015.
GlobalComms adds that, regardless of the claims related to the 2008 cancellation of the BTL Accommodation Agreement, a settlement is necessary to cover compensation for the 2009 re-appropriation of BTL. At the time of takeover, the state put the telco’s worth at approximately USD150 million whereas the ousted private shareholders previously valued the assets at over USD300 million. Upon re-nationalisation, the government said the value must be re-evaluated in light of ‘asset stripping’ by the outgoing management in its dying days in charge.