Belize Social Development Limited v. Government of Belize

5 F. Supp. 3d 25, 2013 WL 6502416, 2013 U.S. Dist. LEXIS 173487
CourtDistrict Court, District of Columbia
DecidedDecember 11, 2013
DocketCivil Action No. 2009-2170
StatusPublished
Cited by13 cases

This text of 5 F. Supp. 3d 25 (Belize Social Development Limited v. Government of Belize) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Belize Social Development Limited v. Government of Belize, 5 F. Supp. 3d 25, 2013 WL 6502416, 2013 U.S. Dist. LEXIS 173487 (D.D.C. 2013).

Opinion

MEMORANDUM OPINION [# # 1, 15, 47]

RICHARD J. LEON, United States District Judge

Petitioner Belize Social Development Limited (“petitioner” or “BSDL”) brings this action against respondent the Government of Belize (“respondent” or “GOB”), seeking the confirmation and enforcement of a foreign arbitral award pursuant to § 207 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 207, and Article III of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention” or “N.Y. Conv.”). 1 Before the Court are petitioner’s Petition to Confirm Arbitration Award *30 and to Enter Judgment [Dkt. # 1] and respondent’s Motion to Stay Action or, in the Alternative, Dismiss Petition [Dkt. # 15]. Upon consideration of the pleadings, relevant law, and the entire record, the petition to confirm and enter judgment is GRANTED, and the motion to stay or dismiss is DENIED.

FACTUAL BACKGROUND

A. Accommodation Agreements

On September 19, 2005, respondent GOB and Belize Telecommunications Limited (“BTL”) 2 entered into the first of four “Government Telecommunications Accommodation Agreements] ... to improve telecommunications for the people of Belize and better accommodate the GOB’s telecommunications needs.” Pet’r’s Mem. of Points and Authorities in Supp. of Pet. to Confirm Arb. Award & Enter J. (“Pet’r’s Mem.”) at 2 [Dkt. # 1-1]; Resp’t’s Mem. in Supp. of Mot. to Stay Action or, in the Alt., Dismiss Pet. (“Resp’t’s Mem.”) at 5-6 [Dkt. # 15]. As part of the agreements (hereinafter, “original agreements”), BTL would acquire certain properties owned by GOB for 19,200,-000 Belize dollars. Pet’r’s Mem. at 2. In exchange, GOB would give BTL preferential tax treatment, exempt BTL from import duties on goods and equipment, guarantee BTL a minimum rate of return on investments, pay any shortfall that may occur between the minimum rate of return and the actual rate of return, and allow BTL to control the use of “Voice Over Internet Protocol.” Id,.; see also Pet. to Confirm Arb. Award & Enter J., Ex. A (“Final Award” or “LCIA Award”) at 20-23 [Dkt. # 1-3] (explaining class license holders and their customers were not permitted to use voice over internet protocol services unless permitted by the individual license holder (BTL)).

The Accommodation Agreements also contained a clause which provided that any dispute would be referred to and resolved by arbitration under the London Court of International Arbitration (“LCIA”) Rules. Pet’r’s Mem. at 4. Over the next few years, the parties amended the original agreement three times and on May 29, 2007, under the third agreement, Belize Telemedia Limited (“Telemedia”) “assumed all of BTL’s rights and obligations under the Accommodation Agreement.” Id. at 3.

On February 8, 2008, Dean Barrow was appointed the new Prime Minister of Belize and his administration refused to acknowledge Telemedia’s rights as set forth in the Accommodation Agreements or to comply with its obligations under the agreements. Id. at 5. Telemedia, on the other hand, complied with its obligations under the Accommodation Agreements by purchasing GOB properties for 19,200,000 Belize dollars. Id.

B. Arbitration Proceedings in the LCIA

Telemedia submitted a request for arbitration to the LCIA on May 9, 2008, claiming multiple breaches of the Accommodation Agreements. Pet’r’s Mem. at 6. The LCIA appointed a Tribunal comprised of three distinguished arbitrators to govern the arbitration proceedings. Id. at 7. GOB refused to participate in the arbitration proceedings, id. at 8; Resp’t’s Prelim. Resp. at 6, and on March 18, 2009, follow *31 ing a three day evidentiary hearing, “the Tribunal unanimously ruled in favor of Telemedia and issued its Final Award,” which granted Telemedia both declaratory and monetary relief, Pet’r’s Mem. at 8; Resp’t’s Mem. at 8. The Tribunal found that: (i) the Accommodation Agreements are legal and binding under Belize law, (ii) “GOB ... violated numerous provisions of the Accommodation Agreement[s],” and (iii) “Telemedia was entitled to relief.” Pet’r’s Mem. at 9.

Two days after the Tribunal issued its Final Award, on March 20, 2009, BSDL was created in the British Virgin Islands. Resp’t’s Prelim. Resp. at 7. That same day, Telemedia assigned to BSDL the monetary portion of the Tribunal’s Final Award, id. at 7-8, thereby allowing BSDL “to enforce and receive the monetary portion of the Final Award,” Pet’r’s Mem. at 9.

C. Belize Litigation and GOB Legislation

In Belize, GOB filed a lawsuit against Telemedia on April 6, 2009, Pet’r’s Mem. in Opp’n to Resp’t’s Mot. to Stay or Dismiss and in Supp. of Pet. To Confirm Arb. Award (“Pet’r’s Suppl. Mem.”) at 3 [Dkt. # 45], seeking a declaratory judgment that the Tribunal’s arbitration award is “unenforceable and the Accommodation Agreements are invalid as contrary to Belize law and public policy,” Resp’t’s Prelim Resp. at 8. 3 On July 20, 2009, the Belize Supreme Court issued a preliminary injunction barring Telemedia and BSDL from enforcing the arbitration award until after the court issued its ruling in the pending action. Id. at 9. The parties dispute whether that injunction remains valid after the April 2009 lawsuit was discontinued and a February 2012 lawsuit instituted in its place. See Resp’t’s Suppl. Br. at 3 [Dkt. # 39] (claiming that “the injunction remains in place”); Pet’r’s Suppl. Mem. at 4 (claiming that “the Belize Supreme Court ordered ... the discharge of the injunction”). 4

GOB also enacted legislation in 2009 to assume control over telecommunications in Belize and obtained 94% of Telemedia’s shares as part of that legislation. Resp’t’s Prelim. Resp. at 9; Resp’t’s Suppl. Br. at 12. In 2010, the Belize Supreme Court of Judicature (Amendment) Act (“SCJA”) made it a criminal offense punishable by fine, imprisonment of at least five years, or both “to disobey or fail to comply with an injunction” issued by the Belize Supreme Court. Pet’r’s Suppl. Mem. at 5. GOB also made it a crime for BSDL and its counsel to respond to the pleadings that GOB had already filed in this case. Id. In August 2012, “the Belize Court of Appeal struck down several sections of the SCJA as unconstitutional,” including the sections *32 giving SCJA extraterritorial effect 5 and the sections imposing criminal penalties. Id. at 6.

D. United States Litigation

BSDL filed its petition in this Court on November 17, 2009. On October 18, 2010, this court stayed the proceeding pending resolution of the case in Belize. Id. at 7. BSDL appealed the stay order and, alternatively, sought a writ of mandamus. Id.

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Cite This Page — Counsel Stack

Bluebook (online)
5 F. Supp. 3d 25, 2013 WL 6502416, 2013 U.S. Dist. LEXIS 173487, Counsel Stack Legal Research, https://law.counselstack.com/opinion/belize-social-development-limited-v-government-of-belize-dcd-2013.