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Apr 30, 2009

Supreme Court Rules in ACB Case Against the Government of Belize

Story PictureThe Association of Concerned Belizeans and Senator Godwin Hulse in 2007 filed a claim in the Supreme Court against the Government of Belize challenging the guarantee for Universal Health Services signed by the Government in favour of the Belize Bank. Today the Supreme Court ruled in that case. Attorney for the Belize Bank, Andrew Marshalleck outlined the background to the case and what the ruling means.

Andrew Marshalleck, Attorney for Belize Bank
“The substance of the complaint was that the then Prime Minster had executed the guarantee in the absence of cabinet approval and certain declarations were sought to establish the unlawfulness of that and orders of restraining the government from making any payments pursuant to the payment of the guarantee. Of course by the time the matter came on to hearing, the case had change substantially so that in the end those declaration that were originally claimed weren’t even considered by the court, much less granted. And the reason for that was that because by time the trial of the claim occurred, and its been more than a year, the guaranteed had been superseded by subsequent arrangements entered into between the government and the bank—first in 2007 and then later on again when arrangements were made for the payment of the Venezuelan and Taiwanese monies. The guarantee which was subject to challenge was no longer relevant so the courts never did considered the challenges to those since it had been superseded by the terms of the settlement agreement and loan note. The orders that were made were that—a declaration was granted that the loan note that was executed on the twenty-third March 2007 under the terms of which the second defendant, the government, was to pay the Belize Bank thirty-three million five hundred and forty-four thousand eight hundred and twenty dollars is unlawful as being contrary to section seven-one and seven-two of the Finance and Audit Reform Act; that declaration was granted. The declaration that the loan facility of Belize twelve million procured by the first and second defendants from the Belize Bank Limited on the twenty-ninth March 2007 is unlawful as being contrary to the same provisions of the Finance and Audit Act was refused. It was also ordered that the claimants do have standings to bring a claim such as this. The orders in fact made have very little to do or rather have very little practical significance given the fact that the Loan Note and the transactions that were considered have in fact since been superseded. So that while that particular Lone Note has been found unlawful, there has been no determination as to the propriety or otherwise of the guarantee or of the liability; any liability of the government arising out of the U.H.S. transactions. The issue of any liabilities to the bank arising out of the transaction is of course for determination in arbitration proceedings in London and those are still ongoing. So as a practical matter is the decision does not impact on those proceedings. The concern primarily, the construction interpretation of the Finance and Audit Act and how those sections are to apply. The loan note is no longer being relied upon by the bank to establish any liability. But it is instruction in that it gives guidance as to how the government is to treat those types of transactions and the need for house approval for those types of transaction before documents of that nature are executed.”

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