Ex-registry owners demand millions in compensation

Arguments concluded late Thursday in the Supreme Court between the Government of Belize and Belize International Services Limited (BISL), the parent company of the International Business Companies and Merchant Marine Registries. Following the Government’s takeover of the organizations in June of 2013, it has been hit with lawsuits by BISL over unfair tax collection as well as its alleged unlawful takeover. BISL is seeking compensation of ninety million Belize dollars – but Government is not willing to pay a dime, according to Senior Counsel vlcsnap-7128-09-22-03h40m16s523Denys Barrow, who spoke to the press corps late Thursday evening.  According to Barrow, BISL as a privately held company had been given authority to administer public funds, contravening Section One-Fourteen of the Laws of Belize which deals with taxes being paid into the Consolidated Revenue Fund.

 

Denys Barrow, Senior Counsel: The case concerns the takeover by government of the 2 registries, the ship’s registry and the international business company’s registry. That takeover occurred in June 2013 when the government decided that that contract which existed for BISL to manage the 2 registries had come to an end, and that a purported extension of the contract from 2013 to 2020 was an unlawful and illegal extension, therefore government is not bound by it and they decided that they would take over the registry. Interesting thing is, that extension was signed in 2005 to take effect in 2013. The claim is for damages and they would have quantifies their claim as being US$45M. The position of the government is that we don’t owe you any money, we should not be ordered to pay any damages because what you had is an illegal contract, and therefore the contract should be held as not having properly existed, as having no existence and therefore there is not anything to damage and to break.

The Government is also relying on a charge that the contract signed with a previous administration to twice extend the original service contract up to 2020 was illegal.

Denys Barrow, Senior Counsel:Both sides filed pre trial submissions. In our submissions we contended that the contract is unlawful because one, it allows a body which is not a government official, which is not a government department, which is not administered by any civil servant or any person of the employment of the government  of Belize to collect millions of dollars every year and every collection that is made of public money, these are taxes, fees and penalties payable by law. The contract allows the people who operated and managed the registries to put that into their own accounts called Escro Accounts but has emerged in the testimony, nobody from government could sign on those accounts, not the financial secretary, not the accountant general, not a single person from government could touch that money. So it means that taxes were not being paid into the consolidated revenue fund as section 114 of the constitution mandates must takes place, it was being paid to these private individuals and then they, when they were ready, and they did it quite regularly, pay out to the government what they calculate amongst to the government agreed percentage.vlcsnap-9522-04-01-03h49m26s746

Senior Counsel Eamon Courtenay and Jose Alpuche represented BISL in the case. A number of international experts testified over the two days of the trial.Both sides must file written submissions by Friday, December 18, after which oral argument is scheduled. A decision is expected around the middle of 2016.

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