CCJ reserves judgement in case brought against BAICO by 2,000 policyholders

The Caribbean Court of Justice (CCJ) has reserved judgement in the case brought by 2,000 policyholders across six countries of the Organisation of Eastern Caribbean States (OECS), including St Vincent and the Grenadines in relation to Trinidad and Tobago’s government handling of the 2009 collapse of CLICO.

British American and Clico Insurance (BACOL), a Caribbean-wide liability company established to secure compensation for aggrieved policyholders, investors and beneficiaries, filed a class action lawsuit against the government which claims that it breached the Revised Treaty of Chaguaramas (RTC), which established the Caribbean Single Market and Economy (CSME) by bailing out only local subsidiaries of CL Financial (CLF), including Colonial Life Insurance Company Ltd, Clico Investment Bank, and British American Insurance Company (Trinidad) Ltd (BAT).

The written submissions outlined that policyholders from the six Eastern Caribbean countries were not offered the same settlement as policyholders in Trinidad and Tobago, and they are seeking to reclaim approximately EC $600 million. BACOL said policyholders lost over $800 million when BAICO collapsed in 2009, and while the investments of Trinidadian policyholders were protected, BACOL policyholders were only able to recoup approximately 14 per cent through the liquidation of the regional subsidiary.

CCJ president, Adrian Saunders and judges Winston Anderson, Maureen Rajnauth-Lee, Andrew Burgess, and Peter Jamadar heard submissions over two days from legal teams representing the policyholders and the T&T government at the Port-of-Spain based court, concluding on April 30.

“The court will take time in this decision on this matter. In due course we will let you know when we are in a position to render judgement in this matter,” the court said.

UK-based attorney, Simon Davenport, submitted to the court that this case is a “story of inequity”.

“A class of Caribbean nationals have been treated unfairly and have impacted the lives of thousands, many of whom have lost essentially all their savings and pension benefits.”

King’s Counsel, Davenport, argued that the T&T government’s actions went against Article 7 of the Revised Treaty of Chaguaramas, which prohibits discrimination based on nationality.

He also said that assets of the Bahamas-registered insurance subsidiary should have been separated in order to meet BAICO’s liabilities rather than be put into a “common pot” by CLF.

“Our position is that the T&T Government brought into a common pot the resources of BAICO, and in exercising the bailout activity, it should have done so on a non-discriminatory basis.”

Davenport stressed that the human toll of the case is a significant one.

“People are dying of poverty as a consequence of this,” he argued.

Senior Counsel representing the T&T government, Deborah Peake, in her oral submissions said that the BACOL policyholders case is hanging their claim on a “thin thread” and noted that there was no evidence that the government intentionally excluded policyholders from the region.

“The RTC was for free trade within a customs union, not to frustrate a government which is protecting its country’s economy…it is not reasonable to use it when the market has collapsed,” she said.

Counsel Peake said when the T&T government signed a Memorandum of Understanding (MoU) with CL Financial for the bailout in 2009, only three local subsidiaries were being considered- CLICO, BAT and Clico Investment Bank (CIB). CLF’s other 39 subsidiaries such as BAICO were not included.

“This case assumes that they (BAICO) were under consideration.”

She also said of the promised $100 million to pay out shareholders, that the T&T government only paid $36 million as the loan from the Caribbean Development Bank to cover the remainder was denied.

“Where were taxpayers to find funds to treat all the subsidiaries the same way?” Peake asked the court.

She added that the BACOL’s case was not grounded in reality.