A large group of British American Insurance Company (Baico) policyholders from Antigua and Barbuda, and Grenada, have lost their novel lawsuit over the Government’s bailout of CL Financial and its local subsidiaries.
In a judgment delivered yesterday afternoon, Caribbean Court of Justice (CCJ) president Adrian Saunders and Judges Winston Anderson, Maureen Rajnauth-Lee, Andrew Burgess, and Peter Jamadar ruled that this country’s government could not be faulted for its failure to extend its bailout to CLF’s regional subsidiaries such as Baico in 2009.
In the lawsuit, the policyholders contended that the Government breached the Revised Treaty of Chaguaramas (RTC), which established the Caribbean Single Market and Economy (CSME), by failing to promote consumer interests through not providing adequate and effective redress for them (consumers).
They claimed that while local policyholders were protected and essentially guaranteed their full investments, they were only able to recoup approximately 14 per cent through the liquidation of the regional subsidiary.
Providing a summary of the panel’s judgment, Justice Saunders noted that the competition-promoting provisions in Article 184 (1), which were cited by the group, were intended to apply to companies and not Member States.
He also stated that the Government would have acted unlawfully if it had unilaterally sought to interfere with subsidiaries outside of its jurisdiction.
Justice Saunders said, “To do so would have been to have acted in an extraterritorial manner that would have been, in the absence of regional agreement, contrary to the comity of Caricom Member States.”
He pointed out that if he and his colleagues had upheld the case, it would have meant that T&T had to compensate all Baico policyholders across the Caribbean.
“The Court found that it could not have been within the contemplation of the framers of the RTC that the Member State in such circumstances, would be obliged to compensate all BAICO policyholders in all Caricom states for all their loss and damage,” Justice Saunders said.
The panel also accepted that the country had objective and reasonable justification to take the action it did to prevent the “severe dislocation of its economy”.
“The Court considered there was no obligation to extend any relief to institutions outside of the Defendant Member State and therefore, no right in the Claimants to obtain the relief they sought,” he said.
Justice Saunders also ruled that the group could claim breach of Article 7 of the RTC, which denounces discrimination on the basis of nationality.
Stating that the group’s members would have had to prove that they were treated differently from similarly circumstanced policyholders of local subsidiaries, Justice Saunders said: “The Court found that the circumstances of policyholders of Clico, British American Insurance Company (Trinidad) (BAT) and Clico Investment Bank (CIB) were not similar to Baico policyholders.”
When the case was filed, by the group in the names of Ellis Richards, Spencer Thomas and the Medical Benefit Board, last year, they alleged other breaches of the RTC in relation to the provision of services to the nationals of other Member States.
Those aspects of the case were rejected by the panel at a preliminary stage on the basis that the country was exercising its governmental authority in the bailout.
Despite the group’s successive legal defeats, the panel ordered the parties to bear their individual legal costs for the case.
