Belize to pay US $18.5 Million for UHS loan agreement

BBN Staff: The US Supreme Court has rejected a request from Belize to review an order to enforce a US $18.5 Million award against the government of Belize stemming from a 2004 agreement signed by former Prime Minister Said Musa, guaranteeing payment of Universal Health Services (UHS) Company’s debt to the Belize Bank.

Belize was appealing a D.C. Circuit ruling that affirmed a trial court opinion saying the arbitral award could go forward. In a petition for writ of certiorari filed on August 8, Belize argued that the ruling was incorrect because Belize is not party to the New York Convention, an international agreement providing for the reciprocal enforcement of international arbitration awards.

The justices denied the petition in its weekly orders list Monday.

At issue was a Belize $36.9 Million award issued to Belize Bank by a London Court of International Arbitration tribunal following a dispute over the complex debt guarantee. The government of Belize appealed that award, which is the equivalent of about US $18.5 million plus interest, to the federal district court in Washington.

A federal judge there ruled in favor of the bank, and a subsequent ruling by the D.C. Circuit in March affirmed that judgment. The D.C. Circuit denied Belize’s bid for rehearing soon after.

But Belize, in its petition, said that US courts read the New York Convention and the US positions on enforcing treaties on non-party states incorrectly.

Belize, formerly British Honduras, was a part of the United Kingdom when that country ratified the New York Convention. The U.K. did not extend its ratification to British Honduras, and Belize never ratified the treaty after it declared independence and changed its name in 1981, the petition said.

Because of that, Belize said it should not be bound by adherence to the treaty.

According to the Belize Bank lawsuit, in 2007, the government entered into a Belize $33 Million settlement agreement after it became apparent that UHS couldn’t pay the debt.

When the government failed to come up with the payments, the bank commenced arbitration proceedings in the London Court of International Arbitration, according to the suit. Those proceedings were terminated in January 2008 after the parties again settled. However, the bank turned back to the London court three months later when, after an election season, the new Belize government filed a lawsuit in Belize Supreme Court to nullify the original loan settlement on the grounds it was invalid.

According to the bank, the next several years of arbitration proceedings culminated in a 2013 award of Belize $36.9 Million plus legal costs and interest.

 

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