Attorney General v Alpuche et Al

• Jurisdiction: Belize
• Judge: Awich, C.J.
• Judgment Date: 10 May 2011
• Docket Number: No. 1042 of 2009
• Date: 10 May 2011
• Court: Supreme Court (Belize)

Supreme Court

Awich, C.J. (Ag.)

No. 1042 of 2009

Attorney General

and

Alpuche et al

Appearances:

Mr. Denys Barrow S.C.; Ms. Lois Young S.C.; and Miss Magali M. Perdomo, for the claimant

Mr. Nigel Pleming Q.C.; Mr. Eamon Courtenay S.C.; and Mrs. Ashanti A. Martin, for the tenth defendant.

Civil practice and procedure - Service of claim form outside jurisdiction — Validity

Injunction - Stay of domestic proceedings in favour of international arbitration — Power of court to grant interim injunction

Awich, C.J. : (AG.):

DECISION

1 Notes: Civil Procedure and Practice - application for court order setting aside service of claim form outside jurisdiction territorial jurisdiction; subject matter jurisdiction - whether jurisdiction of court is excluded because subject matter is subject of arbitration; application for stay of proceedings in favour of international arbitration proceedings – whether both applications were made when the applicant was in contempt of an order of the court, and if so, the consequence to the applications. Application for interim injunction order in restraint of international arbitration proceedings, i.e. injunction order against a party in an international arbitration in a foreign country; power of court when it is just and convenient to grant interim injunction order; the grounds of vexatious, oppressive and unconscionable.

2 This is yet another decision in interlocutory applications in this claim, No. 1042 of 2009. The decision is a composite in three applications. One of them is by the Attorney General, the claimant. The other two are by Dunkeld International Investments Ltd., - Dunkeld, the tenth defendant. All three applications were presented at the hearing on 1st to 5th April, 2011.

3 First in time is the application dated 2.9.2010; it is by the Attorney General. It is for an interim injunction order restraining Dunkeld, by itself, officers, servants, agents, subsidiaries, assignees, attorneys, advisors or others, from taking any or any further steps in the continuation or prosecution of the arbitration proceedings commenced by Dunkeld by Notice of Arbitration dated 26 July 2010, under the Arbitration Rules of the United Nations Commission on International Trade Law 1977, and pursuant to an agreement, the 1982 Agreement Between the Government of Great Britain and Northern Ireland and the Government of Belize, for the Promotion and Protection of Investments. The notice of arbitration mentioned in the application had been given by Dunkeld arising out of or in relation to compulsory acquisition by the Government of Belize of shares in a company known as Belize Telemedia Limited, in short BTL. Dunkeld opposes the application.

4 The second application is an amended application dated 20.12.2010, by Dunkeld. It amended an earlier application dated 5.10.2010, which was for an order discharging an interim injunction order dated 10. 2.2010 (made on 5. 2.2010), by the Hon. Justice Samuel Lungole Awich - myself. That order restrained Dunkeld (and the nine other defendants) from continuing to participate in arbitration proceedings commenced by Dunkeld by Notice of Arbitration dated 4.12.2009. However, seven of the defendants appealed successfully against the injunction order, on the ground that there was no evidence connecting them to Dunkeld who had commenced the arbitration. The order remains in force to date against only three defendants: Dunkeld, Allan Forrest and Peter Gaze. This amended application simply added to order requested earlier a request “for an order setting aside the service of the claim form dated 23rd December 2009, on Dunkeld International Investments Limited.” An important ground for this application is that this court “does not have jurisdiction over Dunkeld, which is a company registered in the Turks and Caicos.” Attorney General opposes the application.

The third application is dated 28. 2.2011, by Dunkeld again. It asks for: “an order pursuant to Rule 26.1(2)(e) of the Supreme Court ( Civil Procedure) Rules, 2005, and section 26(1) of the Arbitration Act, Cap. 125, staying this claim brought by the Fixed Date Claim Form filed by the claimant on 23rd December 2009.” Attorney General opposes this application also.

6 The subject matter of the substantive claim is compulsory acquisition on 25.8.2009 and 4.12.2009, by the Government of Belize, of shares in BTL. The contentions of the parties are, in the end, about compensation resulting from the acquisition. The material transactions and disagreements leading to the claim in which these applications were made were recounted in my decision of 5. 2.2010, in which I made the interim injunction order against all ten defendants, restraining them from taking any or any further steps in the continuation of UNCITRAL arbitration commenced by Notice of Arbitration dated 4.12.2009. Since that decision, parties have taken further steps in the subject matter of the case and so there are more to recount.

7 Parties have also filed more interlocutory applications; and I have rendered a decision in one of them. This is the third decision. Too much time has been taken up by interlocutory applications. Parties have also had further exchanges about the transactions that they disagree over.

8 Attorney General represents the Government of Belize under the Crown Proceedings Act, Cap. 169. The transactions in issue were carried out by the Minister of Finance and the Minister for Telecommunications. Dunkeld International Investments Limited is a company not registered in Belize. In the first affidavit of Mr. Gian Gandhi for the Attorney General, he says that Dunkeld was incorporated in the British Virgin Islands and continued in Turks and Caicos Islands. Mr. Llewellyn Austen for Dunkeld, deposed that Dunkeld was incorporated in Turks and Caicos Islands and had always been resident in Turks and Caicos Islands, but in a later affidavit he corrected that statement, and confirmed what Mr. Gandhi had deposed. Mr. Austen is one of two directors of Dunkeld, the other is Ms. Angela McCarville also known as Ms. Ertwistle.

9 From the evidence so far made available, Dunkeld did not own shares in BTL; but it is said that it had beneficial interests in about 69% or 71% of the shares in BTL held by other companies, or held by companies which held shares for other companies which held the shares for the benefit of Dunkeld.

The Facts

10 Since my decision on 5. 2.2010, Dunkeld has served another Notice of Arbitration, dated 26.7.2010, on the Government of Belize, for commencing another international arbitration proceedings, UNCITRAL arbitration proceedings, between Dunkeld and the Government of Belize. It is about the same compulsory acquisition of BTL shares by the Government of Belize. Attorney General has responded by his interlocutory application dated 2.9.2010, referred to above, for another interim injunction order restraining Dunkeld from proceeding with the second arbitration.

11 As expected, the facts of the claim have expanded since my decision on 5. 2.2010. It is convenient to recap again the material facts so far, on which the substantive claim and the incidental applications have been made.

12 According to the first affidavit sworn by Mr. Joseph Waight, Financial Secretary, for the Attorney General's case, and the first affidavit sworn by Mr. Llewellyn Austen for Dunkeld, the transactions that led to disagreement between the parties in this claim are traceable to a certain accommodation agreement in 2003, and subsequent transactions. They deposed that in 2003, the Government agreed to buy BTL shares held by Carlisle Holdings Ltd, and to immediately sell them together with BTL shares that the Government owned or controlled, to a Mr. Jeffrey Prosser. He was to be given 45 days to pay for the shares. The Government and Carlisle also agreed in a separate agreement that if Prosser failed to pay for the shares, Carlisle had the option to buy all the shares. Prosser failed to pay, Mr. Waight says, the shares were then resold to Carlisle. Mr. Austen says that he heard that by agreement some other companies became the shareholders.

13 According to Mr. Waight, Carlisle was “owned or controlled” by Lord Michael Ashcroft. Carlisle became BB Holdings Limited, and is now BCB Holdings Ltd. It is a holding company with many subsidiaries. Dunkeld is said to be a beneficial owner of shares in some of the subsidiaries in the group.

14 Mr. Waight further says, when Carlisle exercised its option to repurchase the BTL shares, it carried out the repurchase through several companies in the group, such as BCB Holdings Limited, Ecom Limited, Mercury Communications Limited, New Horizons Limited, Thiermon Limited, Sunshine Holdings Limited and Hayward Charitable Belize Trust. He says further that, BCB Holdings Limited, the final holding company in the group is controlled by Lord Ashcroft who ultimately owns the majority shares.

15 According to Mr. Austen, he heard that Carlisle did not itself buy back the shares that Prosser had failed to pay for; but that, “the dispute was settled on terms which did not involve the reacquisition of shares.” He says that, BCB Holdings Limited, Ecom Limited, Mercury Communications Limited, New Horizons Inc., Thiermon Limited and Sunshine Holdings Limited held the BTL shares, but “on trust for Hayward Charitable Belize Trust and Dunkeld.” He explains that, “the relevant shares were held for the benefit of Dunkeld which is ultimately owned by the Hayward Charitable Belize Trust (Hayward).”

16 Mr. Waight also deposes that “there was public turmoil”, about BTL after the change in shareholding from Prosser to Carlisle, owned by Ashcroft, concerning concessions, including tax concessions granted by the government to BTL.

17 In 2008, there was a change in Government. In 2009, the new Government decided to acquire control of BTL. On 25.8.2009, the National...