Caribbean Court of Justice Reserves Judgement on BAICO Policyholders Case Against T&T Government Bailout Decision

A large group of British American Insurance Company (BAICO) policyholders from several Eastern Caribbean countries will have to wait to learn the fate of their lawsuit over a move by the T&T government to bail out only local financial subsidiaries of CL Financial (CLF).

Caribbean Court of Justice (CCJ) president Adrian Saunders and judges Winston Anderson, Maureen Rajnauth-Lee, Andrew Burgess, and Peter Jamadar reserved their judgement in the case after hearing submissions at the court’s headquarters in Port-of-Spain between Monday and yesterday.

“The court will take time for its decision in this matter. We will let you know in due course when we are ready to render a decision,” said Saunders, at the end of yesterday’s sitting.

In the lawsuit, the group is contending that the Government breached the Revised Treaty of Chaguaramas (RTC), which established the Caribbean Single Market and Economy (CSME), by bailing out certain local CLF subsidiaries such as Clico and British American (Trinidad) and not regional subsidiaries such as BAICO.

The group is claiming 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.

Presenting submissions on behalf of the group, King’s Counsel Simon Davenport claimed that the 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.

He claimed that assets of British American International Company (BAICO), the holding company for British American Trinidad, were used in the bailout, but the T&T Government did not accept its liabilities, including to policyholders.

“CL Financial did not distinguish among group companies unless absolutely necessary,” he said.

“This case is not going to bankrupt T&T. The amounts are significant but are only a fraction of the monies injected and now recovered by T&T,” he added.

Davenport referred to a US$100 million fund that was promised by the Government under the tenure of former prime minister Kamla Persad-Bissessar during a Caricom Heads of Government meeting, held in July 2012 in St Lucia.

He noted that T&T only made an initial US$36 million contribution and promised to finance part of the remainder through a loan.