The Central Bank has failed in its final appeal over the ability of insurance company Maritime Life (Caribbean) Limited to pursue a lawsuit over its handling of the proposed sale of Clico and its subsidiary British American Insurance (Trinidad) Limited (BAT)’s insurance portfolios.
Delivering a judgement yesterday morning, five law lords of the United Kingdom-based Privy Council dismissed the Central Bank’s appeal over the decision of a High Court Judge and the Court of Appeal to allow Maritime’s judicial review case to proceed.
The substantive case, brought by Maritime 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 out them and their parent company, CL Financial, in 2009.
According to the evidence in the case, 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 time 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 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 said 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 leave to pursue the lawsuit by High Court Judge Devindra Rampersad, leading the Central Bank to file a procedural appeal.
In February last year, the Appeal Court delivered a majority decision, in which two Appellate Judges agreed with Justice Rampersad’s decision and one dissented.
In deciding the final appeal, Lord Stephens, who wrote the judgement that was supported by his colleagues, 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 had failed to prove that there were exceptional circumstances to warrant departing from the findings of 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 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 outcome of the appeal means that the substantive case will now be considered and determined by the High Court.
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.
