Ports of Belize Ltd and Belize Ports Ltd v Attorney General
| Jurisdiction | Belize |
| Judge | Hafiz Bertram, J. |
| Judgment Date | 27 September 2012 |
| Court | Supreme Court (Belize) |
| Docket Number | 404 of 2007 |
| Date | 27 September 2012 |
Supreme Court
Hafiz Bertram, J.
404 of 2007
Mr. Eamon Courtenay S.C., along with Mrs. Ashanti Arthurs-Martin appearing for the claimants.
Mr. Denys Barrow S.C., along with Ms. Naima Barrow and Ms. Magalie Perdomo appearing for the defendant.
Company Law - Shares and shareholders — Whether defendant in breach of share purchase agreements.
This claim arises out of the privatization by the Government of Belize of the Port facilities situated in Port Loyola, Belize City and Commerce Bight, Dangriga Town.
Port of Belize Limited (“PBL”), the first claimant, is a limited liability company which the Government of Belize incorporated on the 15th November, 2001. It was formed for the purpose of succeeding to the operational business of the Belize City Port which was previously the responsibility of the Belize Port Authority.
Belize Ports Limited (“BPL”), the second claimant acquired over 99% of the issued shares in PBL.
The Attorney General, the defendant is the legal representative of the Government of Belize.
On 18th January, 2002, PBL was granted a contractual licence (“Licence”) for the management and operation of the Belize City Port. PBL was also granted on the same date a Lease over the Commerce Bight Port. On the said day, after PBL had been issued the Licence and Lease, the Government of Belize offered its shares in the company to the public for purchase. The offer was contained in a Government of Belize Prospectus dated 18th January, 2002.
The second claimant, BPL offered to purchase the shares in PBL and was selected by the Government of Belize as the strategic investor to acquire a majority of the shares in PBL.
By a Share Purchase Agreement dated 28th March, 2002, BPL bought 99.55% of the Government shares in PBL. On 1st February, 2003, BPL acquired control of the Ports. The Government of Belize thereafter entered into several agreements with PBL and BPL to implement and regulate the privatization. This includes the Cruise Terminal Agreement dated 29th April, 2004 and the Privatization Cooperation Agreement dated 7th December, 2005.
In a claim filed on 11th September, 2007, PBL and BPL claim a number of declarations that the Government has breached the various agreements and as a result they suffered damages. The Claim is for the following:
- A Declaration that the defendant is in breach of a Prospectus dated 18th January 2002 in which was contained an offer by the defendant to sell the defendant's shareholding in the 1st claimant. 2. A Declaration that the defendant is in breach of the several Agreements set out below, namely: a. A Share Sale Agreement made the 28th March 2002 between the defendant and the second claimant; b. An Agreement made the 29th April 2004 between the defendant, Belize Cruise Terminal Limited, Carnival Corporation and the second claimant; c. A Privatisation Cooperation Agreement made the 7th December, 2005 between the defendant, and the first and second claimants; 3. A Declaration that the defendant is in Breach of a license dated the 18th January 2002 issued pursuant to section 105 of the Belize Port Authority Act granted to the 1st claimant. 4. A Declaration that the defendant is in Breach of a Lease dated 18th January 2002 issued pursuant to section 107 of the Belize Port Authority Act granted to the first claimant. 5. Damages for breach of the License, the Lease and the Agreements. 6. Damages for breach of warranties made by the defendant to the first and second claimants which the claimants relied upon to their detriment. 7. Damages for misrepresentations made by the defendant to induce the claimants to enter into the above mentioned agreements, the License and the Lease knowing and/or being negligent as to whether the material representations and statements were false. 8. Further or other relief and costs.
The Share Purchase agreement was made on 28th March, 2002 between the Government of Belize and BPL. This Agreement was signed for the Government by the Minister at the time, of Budget Management, Investment and Public Utilities. The Directors at the time signed for BPL.
Clause 3 of the said Agreement provides for “Taxation and Foreign Exchange Matters”. Clause 4 provides for “Matters Relating to Future Operations and Corporate Governance of PBL”. The claimants say that the defendant failed to honour clauses 3.1 3.2 and 4.3 of the Agreement by not providing the necessary tax and duty exemptions as agreed therein.
The Cruise Terminal Agreement is dated 29th April, 2004 and made among the Government of Belize, Belize Cruise Terminal, Carnival Corporation and BPL. This was signed by the Prime Minister at the time for the Government of Belize, Vice-President for Carnival Corporation, Director for Belize Ports Limited and Director for Belize Cruise Terminal Limited.
The claimants say that the defendant is in breach of Clause 8 of the Agreement which provides for an option for a third party to build a port for cruise ships in Stake bank only, subject to BPL's existing and continued rights to all revenue streams of the PBL.
The Privitization Cooperation Agreement (“PCA”) is dated the 7th December, 2005 and executed by the Prime Minister at the time, and the Chairman for PBL and BPL.
The claimants say that pursuant to the PCA the parties agreed to take certain steps to implement the privatization and to enable the claimants to more effectively and legally manage and operate the Port operations but they failed to do so.
On 18th January, 2002 the defendant issued a License to PBL pursuant to section 105 of the Port Authority Act. The Licence was issued by the then Minister of Works, Transport and Communications, Citrus and Banana Industries. The claimants say at paragraph 22 of the Claim that the defendant failed or refused to discharge its obligations under the License which has undermined PBL's ability to manage and operate the Port and has caused the claimants to suffer loss and injury. The particulars of the breach are that the defendant has failed to allow the claimants to collect the charges as set out in clause 6.5 of the Licence and/or has refused to enact the necessary legislation required to enable the claimants to legally collect the said charges.
On 18th January, 2002 the defendant issued a lease to PBL pursuant to section 107 of the Belize Port Authority Act. At paragraph 25 of the Claim, the claimants say that the defendant has failed to allow the claimants to collect the charges as set out in Clause 6.5 of the Lease and/or has refused to enact the necessary legislation required to enable the claimants to legally collect the charges. The provisions of Clause 6.5 of the Lease is identical to Clause 6.5 of the License.
The Government of Belize disputed the claim on factual and legal basis.
As a matter of fact, the defendant says that in some instances, the relevant agreement created no obligation to do the things the claimant avers. In other instances, the defendant says that it performed the obligations the claimants say were not performed. Further, by virtue of a Settlement Agreement they settled all outstanding issues. Also, that there has been no misrepresentation.
As a matter of law, the defendant says that the Share Purchase Agreement, the Privatization Cooperation Agreement and the Cruise Terminal Agreement and any amendments thereto are subject to the implied term that all promises and or undertakings made by the Government are subject to all relevant statutory requirements and/or statutory or executive approvals being properly and lawfully met and obtained.
The defendant further says, that in so far as the Share Purchase Agreement, the Privatization Cooperation Agreement and the Cruise Terminal Agreement, the License and the Lease and any amendments thereto purport to fetter the exercise of statutory duties and powers, those clauses are unenforceable.
Further, that if there is an obligation by the Government to enact legislation, this would be unenforceable in that it purports to fetter the power of the legislature to legislate for peace, order and good government of Belize.
The claimants' witness is Mr. Arturo Vasquez, who is the Receiver of the claimants and was so appointed on the 4th January, 2012. He was not cross-examined by the Defence. The defendant in their written submissions submitted that Mr. Vasquez's evidence is limited to what is contained in his witness statement and the attached supporting documents. That beyond producing relevant documents there is no weight to the evidence of Mr. Vasquez, since he was appointed as a Receiver about a decade after the execution of the agreements, hence the reason he was not cross-examined.
The witness for the Defence is Mr. Joeseph Waight, Financial Secretary. He was cross-examined. Although Mr. Waight was not involved in the execution of any of the Agreements, he was involved in implementing several elements in the Privatization Cooperation Agreement.
An objection was raised by the claimants in relation to pleadings in their written submissions. I will first deal with this preliminary issue first.
The defendant in their written submissions contended that any provision in any agreement by which the Government purported or might have been understood to undertake to pass legislation is ultra vires the Executive Government, contrary to public policy and usurpation of the functions of the legislature.
The claimants at paragraph 70 of their written submissions in response to this argument contended that the defendant has not pleaded the...
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