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Mar 19, 2009

Court awards Telemedia 38.5 Million dollars

Story PictureRemember the Accommodation Agreement? It was signed back in September 2005 between the Government and Telemedia and had been fully implemented by both parties for nearly two and half years. Then soon after assuming office in February 2008, the Barrow administration declared that the agreement was no longer valid. In the months ensuing, it became a rather prickly issue; Telemedia’s top Executive was threatened with arrest and the telephone company was slapped with an increase of more than five percent in business taxes.

So Telemedia turned for readdress to the London Court of International Arbitration pursuant to a provision in its contract with the Government, which provided that any dispute arising from the agreement that cannot be resolved amicably would be referred to the L.C.I.A. The proceedings before the L.C.I.A. commenced in May last year and although G.O.B. was given full notice of the proceedings it chose not to be represented. Well, now a decision was handed down yesterday and it is a major victory for Telemedia who has not only been awarded in excess of thirty-eight point five million dollars in damages for breach of the agreement by the Government, but has had the L.C.I.A. confirm that the Accommodation Agreement is a valid agreement and fully binding upon the Government. Chairman of the Executive Committee of the Board of Telemedia, Dean Boyce, spoke to News Five today about the agreement, the L.C.I.A. award and what it means for employees and shareholders.

Dean Boyce, Executive Chairman, Telemedia
“The accommodation agreement was signed back in 2005 and operated quite successfully through to early 2008 at which time the new administration in February decided that it wouldn’t continue to honor the terms of that agreement. So after that was sort of clear in 2008, we under the contract, for dispute resolution mechanism to go to the court of arbitration to seek a resolution to the problem. And the court has now concluded; made its ruling and has awarded Belize Telemedia thirty-eight and a half million Belize Dollars.”

Jose Sanchez
“The government did not participate in the proceedings in London and it says that the agreement is invalid. How does that impact the judgment?”

Dean Boyce
“The government was entitled to participate in the proceedings and in fact the arbitration—Court of Arbitration had jurisdiction to decide initially whether the contract was a valid one before looking at the extent of the award under the contract and the government was entitled to participate in the discussions and chose not to. But it does not change in any way the validity of the ruling and the courts jurisdiction over this matter. So the award is a valid one and it’s an important one.”

Jose Sanchez
“Who benefits from this award?”

Dean Boyce
“We have almost ninety-five percent of the company is owned by charities. It’s the employees who, the employee’s trust is about twenty-three percent owners of the company and over seventy percent is owned by the Hayword Charitable Trust. And that trust has already made clear its ambitions to develop a number of charitable operations within the country and those charities, therefore, and Belize will benefit directly from this award. In addition to the ninety-five percent to the charities, another eight hundred or so Belizean shareholders that own, collectively, the five percent, they will also directly benefit from this award.”

Jose Sanchez
“Is this binding with the government?”

Dean Boyce
“This is a binding contract. It’s a valid contract from day one. The Court of Arbitration has ruled it is a valid contract. So we’ll certainly continue to work under the contract and we’ll work to our commitments under the contract and what we’d like to do is work with closely with the government going forward in partnership and resolve any of our outstanding issues. I’m sure that’s in the best interest of the country as a whole in many ways so I’m looking forward looking to a change going forward.”

Jose Sanchez
“If the government doesn’t pay, what will you do next?”

Dean Boyce
“Well, I think we have to initially sit down with them and discuss those matters. I don’t think we should jump to the conclusion that they won’t pay. The benefits of continuing with that agreement for the country and for the government is really exceptional if you look at the work we do at the moment; reductions in tariffs, free internet for schools, rural program for deployment of telecommunication services. These are all things the government should be working closely with us and I think they will work closely with us in the future.”

Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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