By Alexis R. Milan, Staff Reporter
The government of Belize, according to a decision by arbitrators in the case between GOB and British Caribbean Bank (BCB), must pay US$41,773,096.04 for a loan Belize Telemedia Limited (BTL) took out in 2007.
The decision was made by a three member panel of international arbitrators on Friday. GOB, meanwhile, has since sought legal advice and has decided to mount a challenge to the decision.
According to GOB, when they acquired the shares in BTL owned by various Lord Ashcroft-related companies in 2009, BCB demanded payment of the loan and threatened to wind up Telemedia. In reaction, GOB acquired the loan from BCB, which meant that GOB now owned the loan, preventing BCB from undermining the acquisition and winding up Telemedia. In turn, it meant that GOB now became liable to pay BCB, and that Telemedia now became liable to pay GOB.
GOB said they have always acknowledged its obligation to pay compensation to BCB but added that the reason why they haven’t is that Telemedia, to whom GOB looks to provide that money, has objected that the loan was contracted for an illegal purpose and should not be repaid by Telemedia, but should be paid by those persons who actually got the benefit of the loan. Telemedia’s objection was that the money was borrowed so that Telemedia could use that money to enable a subsidiary to purchase Telemedia’s own shares, which it maintained is illegal. The shares were later distributed to the Ashcroft-related companies.
The arbitrators have overruled that objection, which GOB put forward in the arbitration. That objection, however, still has a case pending before the Supreme Court of Belize, brought jointly by Telemedia and GOB against BCB, seeking a declaration that the loan was illegal and may not be enforced.
While the arbitrators awarded compensation to BCB in an amount equivalent to the face amount of the loan, the arbitrators refused to award any additional compensation claimed by BCB.