Derek Achong
Lawyers representing insurance company Maritime Life (Caribbean) Limited and the Central Bank are currently locked in negotiations over the future of a lawsuit over the proposed sale of Clico and its subsidiary British American Insurance (Trinidad) Limited (BAT)’s insurance portfolio.
When the lawsuit brought by Maritime Life came up for a virtual hearing before Justice Devindra Rampersad yesterday, the parties’ lawyers indicated that they were in talks over the substantive issues raised in the case as well as an application from the Central Bank to lift an injunction blocking the proposed sale.
Guardian Media understands that in the application the Central Bank is contending that it should no longer be bound by the injunction after it relinquished emergency control of the companies to their shareholders in early December, last year.
Justice Rampersad gave the parties until next Monday to report back on the progress of the discussions in relation to the injunction. In the event that the parties cannot come to an agreement, Rampersad is expected to issue directions for the determination of the application.
Justice Rampersad also adjourned the substantive case to a date in September, which is to be subsequently confirmed.
The substantive case brought by Maritime Life in late 2019 centres around the bidding process employed for the sale by the Central Bank, which assumed control of the companies after the Government bailed them and their parent company CL Financial (CLF) out in 2009. CLF is currently under liquidation to repay its remaining debt to the Government and other creditors.
Although Maritime emerged as the sole participant in the second round of bidding, it did not win the bid.
Instead, the company was invited to participate in a third round of bidding during which it bid $7.86 billion for Clico’s portfolio and $516.8 million for BAT’s.
While the company was informed that it was not the preferred bidder, Finance Minister Colm Imbert announced that Barbados-based insurance giant Sagicor was chosen despite providing a bid that was $300 million less than Maritime’s.
After the lawsuit was filed, Central Bank Governor Dr Alvin Hilaire filed an affidavit in response in which he explained the process that was employed by international consultancy firm Oliver Wyman.
Hilaire noted that the preferred bidder was not selected solely based on the highest bid. He claimed that while the highest bid was the third-ranked criteria for selection, he noted that Sagicor was selected based on its relative size, experience, financial strength, regulatory attitude, and future risk-absorbing capacity.
He also pointed to a privilege clause in the tender document, which indicated that the Central Bank was free to alter and terminate the procedure and was not obliged to accept the highest or any offer.
Maritime was granted the injunction and leave to pursue the lawsuit by Justice Rampersad, who ruled that it had presented a valid case with a reasonable prospect of success at trial.
The Central Bank filed a procedural appeal in which it contended that the case should not be allowed to proceed to trial.
In February 2021, the Appeal Court delivered a majority decision, in which two Appellate Judges agreed with Justice Rampersad’s decision and one dissented.
In July, last year, the Privy Council upheld the two consistent decisions by the local courts.
In the judgement, Lord Ben Stephens noted that the Privy Council, as the country’s final appellate court, is slow to overturn two consistent rulings by local courts over the realistic prospect of success in judicial review cases.
He stated that the Central Bank failed to prove that there were exceptional circumstances to warrant overturning the local courts.
“The Board examined with care the detailed critique of the evidential material provided on behalf of the appellant but considers that it does not approach the requisite standard of some exceptional circumstance,” Lord Stephens said.
He also pointed out that preliminary challenges such as the one mounted by the Central Bank should not be used to derail and delay cases with strong public interest considerations.
“The public interest will generally not be served by the parties engaging in satellite litigation by second appeals against the grant of leave to apply for judicial review,” Lord Stephen said.
Lord Stephens also rejected the Central Bank’s secondary ground of appeal over Maritime’s ability to pursue a constitutional aspect of its case, in which it is alleging that its right to equality before the law was infringed as Sagicor was allegedly treated more favourably than it.
He noted that as the issue was not raised in the local courts it could not be pursued on a final appeal.
“Furthermore, there is evidential material supporting the challenge so that even if the appellant had made an application to strike out the constitutional challenge, the Board would have dismissed that application,” Lord Stephens said.
The Central Bank was represented by Ian Benjamin, SC, Kerwyn Garcia, and Dionne Springer. Edward Fitzgerald, KC, Fyard Hosein, SC, Joseph Middleton, Sasha Bridgemohansingh, Annette Mamchan, and Aadam Hosein represented Maritime Life.