In April government ordered the Belize Bank to refund the US$10 million in Venezuelan grant funds. The money was gifted to Belize for housing construction but the last government re-directed it instead to the Belize Bank as partial settlement of the government guaranteed debt for Universal Hospital.
So when the government demanded a refund of the diverted funds, for the Belize Bank that triggered the comprehensive arbitration agreement which the Musa administration had agreed to in 2007. That meant the question of the refund was going to arbitration in the UK at the London Court of International Arbitrators. In May the now departed Solicitor General got the Supreme Court to issue an injunction against the proceedings in the UK.
So two weeks ago, Belize Bank attorney and British QC Nigel Pleming appeared in the Supreme Court and argued that the injunction should be lifted because under the sweeping terms of the Musa arbitration agreement, any dispute has to go to a British arbitral tribunal. The Solicitor General and Senior Counsel Michael Young argued that because of the nature of the claim, it is not a matter that should be arbitrated in a foreign jurisdiction.
Highly technical arguments lasted two days and today, two weeks later the Chief Justice delivered his judgement. He found that the arbitration agreement is operational and it is legal and further that the present dispute is covered by it. So with that, he ordered a stay of the government’s claim for the US$10 million, and lifted the Supreme Court’s May 2nd injunction which now gives the Belize Bank the freedom to seek arbitration in London. He also ordered government to pay costs of $10,000 to the Belize Bank.
Depute this, the government is determined not to cede to British arbitration which will be both costly and without the advantages of a legal home court. And so we are advised that government will vigorously appeal today’s decision.
