Belize Telemedia Limited v the Attorney General of Belize (on behalf of the Government of Belize), LCIA Arbitration No. 81079
LCIA · Investment (ICSID and treaty) · Belize · 18 Mar 2009
Why it matters
This case is a landmark example of a commercial arbitration award against a sovereign state that refused to participate. It demonstrates the enforceability of contracts signed by a prior government and the tribunal's willingness to award substantial damages and declaratory relief despite the state's non-participation. The award also illustrates the use of set-off rights and the calculation of damages for breach of contractual rate-of-return and tax provisions.
Summary
Belize Telemedia Limited (Telemedia) entered into an Accommodation Agreement with the Government of Belize in 2005, which guaranteed a minimum 15% rate of return and favorable tax treatment. After a change of government in 2008, the new administration refused to honor the agreement, calling it a 'secret agreement.' Telemedia initiated LCIA arbitration in London. The Government did not participate. The tribunal, chaired by Alan Redfern, found the agreement binding and awarded Telemedia declaratory relief and damages for breach, including shortfall amounts, tax adjustments, and lost profits. The total damages awarded were BZ$35,415,427 plus interest and costs. The award is significant for its treatment of state contracts and the tribunal's exercise of jurisdiction despite the state's absence.
The detail
Parties: Belize Telemedia Limited v the Attorney General of Belize (on behalf of the Government of Belize), LCIA Arbitration No. 81079
Case number: italaw/cases/4535
Outcome: The Tribunal granted declaratory relief to Telemedia that the Accommodation Agreement is binding and ordered the Government to pay damages totaling BZ$35,415,427 plus interest and costs.
Quantum: BZ$35,415,427 plus interest and costs
Applicable law: Belize law; LCIA Rules; Accommodation Agreement
Issues in play: The dispute involved the validity and enforceability of a contract (the Accommodation Agreement) between a telecom company and the government, with the new government arguing the agreement was secret and invalid. The tribunal applied Belize contract law and the LCIA Rules.
Read the full decision at italaw ↗
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