- CCJ reserves judgement in BACOL case
The Trinidad-based Caribbean Court of Justice (CCJ) has reserved judgement in a lawsuit brought against the Trinidad and Tobago government over the 2009 collapse of the British American Insurance Co. Ltd and Colonial Life Insurance Co. Ltd insurance giants.
The British American Insurance Co. Ltd and Colonial Life Insurance Co. Ltd. Policy Holders Group (BACOL) brought the lawsuit, claiming that after 15 years of perseverance, it has “significantly advanced the pursuit of financial justice” for policyholders in Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines who have “suffered extreme financial loss and hardship” after the collapse of the British American Insurance Co. Ltd. (BAICO).
BACOL said the collapse resulted in losses of over EC$800,000,000 (One EC dollar=US$0.37 cents) to businesses and individuals.
Over the past two days of hearing in the matter Ellis Richards and others versus Trinidad and Tobago, the CCJ, which has an Original Jurisdiction and also acts as an international tribunal interpreting the Revised Treaty of Chaguaramas (RTC) that governs the regional integration movement (CARICOM), reserved judgement on the matter.
“I want to thank counsel for your submissions and in due course we will let you know when we are in a position to render a judgement in this matter,” said CCJ President, Justice Adrian Saunders, who heard the matter along with justices Winston Anderson, Maureen Rajnauth-Lee, Andrew Burgess, and Peter Jamadar.
Lawyers for the policyholders argued that the Trinidad and Tobago government breached the Revised Treaty of Chaguaramas (RTC), which established the Caribbean Single Market and Economy (CSME), by bailing out certain local CL Financial (CLF) subsidiaries such as CLICO and British American (Trinidad) and not regional subsidiaries such as BAICO.
The lawyers, including former St. Lucia prime minister, Dr. Kenny Anthony, said that while local policyholders were protected and essentially guaranteed their full investments, the Eastern Caribbean policyholders were only able to recoup approximately 14 per cent of their investments through the liquidation of the regional subsidiary.
King’s Counsel Simon Davenport said that the Trinidad and Tobago government’s actions breached Article 7 of the RTC, which prohibits discrimination based on nationality.
“Every Caribbean person is equal before the law,” Davenport said, noting that assets of BAICO, the holding company for British American Trinidad, were used in the bailout, but the Port of Spain did not accept its liabilities, including to policyholders.
“CL Financial did not distinguish among group companies unless absolutely necessary,” Davenport said, adding “this case is not going to bankrupt Trinidad and Tobago. The amounts are significant but are only a fraction of the monies injected and now recovered by Trinidad and Tobago,” he added.
Davenport referred to a US$100 million fund that was promised by the Trinidad and Tobago government under the tenure of former prime minister Kamla Persad Bissessar during a Caribbean Community (CARICOM) summit held in St. Lucia in July 2012.
He told the court that Trinidad and Tobago only made an initial US$36 million contribution and promised to finance part of the remainder through a loan.
Davenport argued that the government also breached Article 184 of the RTC, which requires member states to promote the interests of consumers by providing adequate and effective redress.
But in response, Senior Counsel Deborah Peake, who led a team of lawyers for the Trinidad and Tobago government, argued that there was no evidence that BAICO’s assets were used in the bailout.
She said when the Trinidad and Tobago government signed a Memorandum of Understanding (MoU) with CL Financial for the bailout in 2009, only three local subsidiaries, namelt CLICO, BAT and Clico Investment Bank (CIB) were under consideration and not CLF’s 39 other local, regional and international subsidiaries including BAICO.
“This case assumes that they (BAICO) were under consideration.” she said, as she noted that the claimants had to prove that the government knowingly excluded regional policyholders,” Peake said, arguing that the policyholders’ case was based on a misunderstanding of the RTC.
“The RTC was for free trade within a customs union not to frustrate a government which is protecting its country’s economy,” she said, adding that consumer protection requirements, were meant to deal with anti-competitive behaviour.
“It is not reasonable to use it when the market has collapsed,” she said.
Regarding the US$100 million fund, Peake said that it was not binding or enforceable as it was not a decision made by regional leaders.
“It was a commitment,” she said, noting that in July 2016, the Ministry of Finance wrote to the Governor of the St. Kitts-based Eastern Caribbean Central Bank (ECCB) indicating that a loan from the Barbados-based Caribbean Development Bank (CDB) was not approved and that further funding was not possible due to the unfavourable economic environment.
“Where were taxpayers to find funds to treat all the subsidiaries the same way? This is not grounded in reality,” she argued.
