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Sep 20, 2016

Did Government Underpay the First Instalment of Arbitration Award?

Eamon Courtenay

The Government has said that the tribunal divided the award into a forty-sixty ratio; forty percent of the total representing the non-Accommodation Agreement portion and sixty percent representing the Accommodation Agreement portion.  But government’s interpretation is that the lion’s share of the total figure is owed in Belize dollars and can only be spent to fund projects in Belize for the benefit of Belizeans. However, Dunkeld’s attorney says that the payment was to be split in half; the first half being paid ten days after the award was handed down. That first half was to be paid in U.S. dollars; the balance to be used for the benefit of Belizeans was to be taken from the second payment, which is due next year. But the Government’s attorney still believes that Belmopan’s intentions were good, though their execution was awry. We hear from both sides.

 

Eamon Courtenay, Attorney for Dunkeld International Investments

“That is not what the agreement says. After the award came out, that is what the Government is saying, that they intended to put in the agreement – it is not in the agreement. The agreement says that the amount attributable to the Accommodation Agreement should be subject to certain deductions. The first deduction is the “Dunkeld Attributed Liabilities;” once that is taken out, then the balance is paid into an account for the benefit of the Belizean people. However, what the agreement says first, is that half of the amount, the total award, is to be paid to Dunkeld and the Employees’ Trust. And therefore, the split is not between the amount in the Accommodation Agreement and the shares – the split is fifty percent of the total award; pay the first amount to Dunkeld and the Trust; and then you work out the balance with respect to the Accommodation Agreement. It’s a bit complicated; the Court criticized the drafting of the agreement, but the result of the understanding of the agreement in our view, is that whatever is to be paid and to be used for the Accommodation Agreement for the people of Belize must come out of the second payment and not the first payment, and I think that the Court seemed – I want to emphasize again that they did not make a decision – but they seemed to be persuaded that that is so.”

 

Denys Barrow

Denys Barrow, Attorney for Government of Belize

“The court accepted that the agreement provided that the Accommodation Agreement portion of the value will go for the benefit of the people of Belize. So that was clearly, totally accepted by the Court. The issue for the Court is that there was a provision which said that payments would be made in two instalments, and the first instalment of fifty percent, would be for the benefit of the claimant companies. As you may gather, there was a false assumption all around that the Accommodation Agreement value of the shares would have been less than the pure share value. It turns out that the Barrow administration was extremely wise in resisting all this while, agreeing to pay the Accommodation Agreement, and in stretching out this litigation, so that the compromise which was reached was that the Accommodation Agreement value would go for the benefit of the people of Belize. So the one little issue we have here is not that; the one little issue we have here is that the assumption was that the pure share value would have been sixty-forty – that the value of the shares would have been sixty percent of the total compensation, and the value of the Accommodation Agreement would have been forty percent. It turns out that it went almost completely the other way – the value of the Accommodation Agreement portion of the shares was I think something like almost seventy percent, and the pure share value was like thirty percent. So when they agreed that fifty percent of whatever the compensation was would have been paid up front, that assumed that the pure share value would have been greater than fifty percent; it was less. So that is why we are here.”

 

Courtenay also told us that he and other attorneys were fully involved in the composition, amendment and final approval of the settlement agreement.

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