Tuesday, July 23, 2024

CCJ rules Belize Government Breached Contract; Company to be Awarded Damages

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In a judgment delivered on 30 June 2020, the Caribbean Court of Justice (CCJ) granted an appeal in the Appellate Jurisdiction matter of Belize International Services Limited v Attorney General of Belize[2020] CCJ 9 (AJ) BZ.

In 1993, Belize International Services Limited (BISL) entered into an agreement with the government of Belize to manage two registries (IMMARBE and IBCR). Under this agreement, the income earned by these two registries was to be deposited in several escrow accounts. From these monies, BISL was entitled to take 40% for expenses and from the remaining net income another 40%. Sixty per cent would be paid to the government. In 2005, the agreement was extended to June 2020 (the Extension Agreement). However, in June 2013, the government forcefully took control of the registries and BISL subsequently accused the government of a breach of contract.

BISL filed a claim on March 26, 2015 against the government for damages resulting from this breach of contract. The government’s main defence was that the Extension Agreement went against the Constitution and legislation, which requires all monies for the government to be paid into the Consolidated Revenue Fund. They argued that this made the agreement illegal, void, and unenforceable (the illegality defence).

On October 28 2016, the Honourable Mme Justice Arana in the Supreme Court of Belize decided in favour of the government, finding the Extension Agreement offended the provisions of the Constitution and legislation and that the agreement was therefore unconstitutional, illegal, and void. BISL’s claim for the recovery of US45$ million was dismissed. BISL filed an appeal with the Court of Appeal on 12 December 2016. The appeal was heard by the Honourable Sir Manuel Sosa, Mme Minnet Hafiz-Bertram and Lennox Campbell, Justices of Appeal. The Court of Appeal dismissed the appeal and affirmed the decision of the Supreme Court. BISL then filed an appeal with the CCJ.

Although arriving at their decision for varying reasons, the CCJ judges all found that the government had breached its agreement with BISL and could not rely on the illegality defence to prevent BISL’s claim for damages. Strictly speaking, the payment structure of the agreement did not meet the constitutional and legislative requirements for payment into the Consolidated Revenue Fund, but this was not sufficient to prevent BISL from the recovery of damages. The CCJ ordered that the matter be remitted to the Supreme Court for assessment of damages. Costs were awarded in favour of BISL, to be taxed if not agreed by the parties.

The judgment was delivered by the CCJ comprising the Hon. Mr. Justice Wit, Mr. Justice Anderson, Mme Justice Rajnauth-Lee and Mr. Justice Burgess and Mr. Justice Jamadar. The Appellant was represented by Mr. Eamon Courtenay, SC and Ms. Priscilla Banner and the Respondent was represented by Mr. Justin Simon, QC and Mrs. Samantha Matute-Tucker.

The full judgment of the Court and a judgment summary are available on the Court’s website at www.ccj.org

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