Court of Appeal decision trashes LCIA $40 million “Settlement Deed”

A ruling handed down on Friday, August 3, by the Belize Court of Appeal, has taken the Government of Belize off the hook to the tune of some $40 million dollars, from a ruling that BCB Holdings Limited and the Belize Bank Limited had secured from the London Court of International Arbitration (LCIA) with respect to a Settlement Deed  signed by former Prime Minister Said Musa.

The Belize Supreme Court  ruled in 2010 that the arbitration award was enforceable in Belize.

But in its split decision ruling, the appeal court found that the independent nation of Belize had  not contracted to the 1958  United Nations New York Convention, which governs international arbitration between states.

When the government gave the New York Convention its nod of approval, it did not have the requisite authority to do so, because it was still a colony of Great Britain.

This means Belize is not bound by the international treaty on arbitration that is covered under the New York Convention.

Mr. Justice of Appeal Duke Pollard wrote near the end of his judgment that: “It is clear that since the New York Convention does not apply to Belize at the level of international law either by express consent or the operation of law, there is no legal obligation on the part of Belize to recognize and enforce domestically arbitral awards within the contemplation of the New York Convention in accordance with Article 3 of that instrument…”

The court awarded cost to the government of Belize.

The Court of Appeal also dismissed, by a majority of its judges, another appeal filed by the British Caribbean Bank seeking to lift a Supreme Court injunction so that it could proceed with the arbitration process that it had started in England.

This injunction, however, cannot be indefinite. It will only hold until the determination of the substantive claim is heard.

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