Derek Achong

In­sur­ance com­pa­ny Mar­itime Life (Caribbean) Lim­it­ed will have to wait to learn if it can pur­sue its law­suit over the Cen­tral Bank’s pro­posed sale of Colo­nial Life In­sur­ance Com­pa­ny Lim­it­ed’s (Cli­co) tra­di­tion­al in­sur­ance port­fo­lio to its Bar­ba­dos-based ri­val Sagi­cor.

Five Law Lords of the Unit­ed King­dom-based Privy Coun­cil on Wednes­day re­served their de­ci­sion on the Cen­tral Bank’s ap­peal, over the de­ci­sions of the High Court and the Court of Ap­peal to al­low the com­pa­ny to pur­sue its ju­di­cial re­view case over the pro­posed sale.

The case brought by Mar­itime cen­ters around the bid­ding process for Cli­co and its sub­sidiary British Amer­i­can In­sur­ance Trinidad’s (BAT) in­sur­ance port­fo­lio.

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, when it bid $7.86 bil­lion for Cli­co’s port­fo­lio and $516.8 mil­lion for BAT’s.

While the com­pa­ny was in­formed 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 claimed that while the high­est bid was the third-ranked cri­te­ria for se­lec­tion, 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.

The Cen­tral Bank first ap­pealed af­ter a High Court Judge grant­ed Mar­itime Life leave to pur­sue the case and put the sale on hold pend­ing the de­ter­mi­na­tion of the sub­stan­tive case.

In Feb­ru­ary last year, the Court of Ap­peal de­liv­ered a ma­jor­i­ty de­ci­sion in which two Ap­pel­late Judges agreed with their col­league’s de­ci­sion and one did not.

In his judg­ment, Jus­tice Ron­nie Boodoos­ingh said the judge was cor­rect not to dis­miss Mar­itime’s chal­lenge to the clause at a pre­lim­i­nary stage.

“The judge found that there was an ar­guable case that this clause did not ap­ply with­out mak­ing any con­clu­sions on it. This was a cor­rect ap­pli­ca­tion of the test at the leave stage of ju­di­cial re­view,” Jus­tice Boodoos­ingh said.

While he not­ed that courts are hes­i­tant to al­low ju­di­cial re­view cas­es in­volv­ing com­mer­cial trans­ac­tions by pub­lic au­thor­i­ties, he said based on the ev­i­dence pre­sent­ed thus far in the case, it was ap­pro­pri­ate.

“When it bid, Mar­itime did so as a mem­ber of the pub­lic en­ti­tled to fair treat­ment from the pub­lic en­ti­ty. If it was able to point to facts that rea­son­ably in­formed per­sons in the fi­nan­cial sec­tor may raise ques­tions about, ex­clu­sion at the leave stage would not or­di­nar­i­ly be ap­pro­pri­ate,” he said.

“It is dif­fi­cult to con­clude that the judge was plain­ly wrong to de­cide that this re­quired a deep­er ex­am­i­na­tion at a tri­al,” Jus­tice Boodoos­ingh added.

In his judg­ment, Jus­tice James Aboud al­so up­held the ap­proach tak­en by the tri­al judge.

In his dis­sent­ing judg­ment, Jus­tice Pe­ter Ra­jku­mar gave eight rea­sons why he felt that his col­leagues and the tri­al judge got it wrong.

“Fun­da­men­tal­ly, the ma­jor­i­ty, have failed to ap­pre­ci­ate that the al­le­ga­tions with re­spect to ir­ra­tional­i­ty are all based up­on the ap­pli­ca­tion of cri­te­ri­on and weight­ing there­of in an eval­u­a­tive process by an in­ter­na­tion­al ex­pert ap­point­ed for this very pur­pose, and that no re­view­able mat­ter has been demon­strat­ed by the sub­se­quent in­volve­ment of ei­ther the Cen­tral Bank or the min­is­ter,” Ra­jku­mar said.

The Cen­tral Bank took con­trol of Cli­co af­ter the Gov­ern­ment was in­vit­ed to bail-out its par­ent com­pa­ny CL Fi­nan­cial in 2009. 
In 2017, the Gov­ern­ment suc­cess­ful­ly pe­ti­tioned High Court Judge Kelvin Ram­cha­ran to liq­ui­date CLF to clear the re­main­der of the over $25 bil­lion it in­vest­ed to res­cue the cash-strapped con­glom­er­ate. The process is still on­go­ing.

A group of CLF share­hold­ers has al­so brought le­gal ac­tion against the Cen­tral Bank, Fi­nance Min­is­ter Colm Im­bert, and the State over a de­ci­sion to sell its sub­sidiaries’ in­sur­ance port­fo­lios.