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Antigua and Barbuda: Expropriation in Antigua & Barbuda
27 July 2005
Article by Ian Moncrief-Scott
After sixteen months of power, The Government of Antigua & Barbuda, led by the United Progressive Party under the stewardship of the Honourable Baldwin Spencer, has once again sent mixed signals on its adoption of international good practice with regard to foreign direct investment.
It took a torrid, ill-tempered debate lasting six hours for the Parliament to ratify a decision of the Cabinet to return the Half Moon Bay Property to its rightful owners, without pre-conditions. In return, H.M.B. Holdings Limited is being asked to drop its Appeal to Her Majesty’s Privy Council for the hearing of a Judicial Review into the forced acquisition process commenced by the previous administration.
The dropping of this Appeal has been previously discussed and agreed to by both sides, should an out-of Court settlement be reached. As such, it poses no problem to the resolution of the matter.
However, as part of the total process, the Government has also requested the Company to provide the Government with an indemnity from all claims and damages resulting from actions associated with the acquisition process. This unusual step by a sovereign power has thereby introduced complex legal issues into a simple matter.
During the abusive and offensive exchanges in Parliament, the Opposition Antigua Labour Party members promised to overturn the current Cabinet's decision should they ever be returned to power.
The indemnity requested also extends to these former Administration and current Opposition individuals, who continue their track of fraudulent and malicious misrepresentation of facts and the vilification of the Company's Directors.
In these circumstances, a blanket indemnity, if granted, would certainly increase the jeopardy for the Company's future. It would also elevate the risks for any legitimate lender involved in the redevelopment of the property, especially given the Bird-led former Administration’s history of mal-governance and its well–documented links to terrorism, arms smuggling and narcotic trafficking.
The gravity of this request for indemnification was further brought home by the accidental discovery of an unannounced, illegal act by the current Administration.
While negotiations were ongoing in good faith between the Company and the Government as to the best way forward, the Attorney General, Justin Simon, caused the title to the property to be transferred from its owners to The Government of Antigua & Barbuda.
In a meeting late January 2005, the Honourable Prime Minister, Baldwin Spencer assured the Company's Managing Director, Mrs Natalia Querard, that the matter would be brought to Parliament before the end of February for a reversal of the Declaration passed by the previous Administration, which granted the Government power to forcibly acquire the property under the Land Acquisition Act.
Instead, by the end of February, the Attorney General requested that the Company voluntarily relinquish title to its property to the Government, so that the Government could then deed it back.
The Company refused to engage in such process. It continued negotiating an alternate approach to the resolution, which was being pursued in writing and in personal meetings up to July 1st, firmly believing that as no compensation had been paid nor expropriation completed, the acquisition process could simply be abandoned.
Meanwhile, without notification to the Company, the Attorney General transferred title to the Half Moon Bay property from its rightful owners to the Government of Antigua & Barbuda, effective 8 March 2005.
Even more significant than the extreme breach of good faith signalled by this action, is the breach of an Undertaking given before Mr. Justice Ian Donaldson Mitchell and recorded in an Order of the Court dated 16 March 2002. That Undertaking was given by the Cabinet of Antigua & Barbuda and by the Attorney General of Antigua & Barbuda. It stated that neither of these entities would take any action whatsoever with respect to the Company’s property until the hearings of the Judicial Review were completed.
This action illustrates a dangerous trend of imposing the powers of the legislature over those of the judiciary. By breaching his own Undertaking, the Attorney General has committed a grave legal offence, in an attempt to move the dispensation of Justice from the Courts to the Cabinet and to move the Country from a Constitutional Democracy to a Political Protectorate.
When coupled with Justin Simon’s campaign to substitute a regional court (the Caribbean Court of Justice) for Privy Council, as the highest instance of legal protection and recourse, this action has very serious ramifications for all investment in Antigua & Barbuda.
Within the more specific parameters of the Half Moon Bay case, the current Administration has chosen to continue the process initiated by its predecessor. By taking a big step forward towards the completion of expropriation of foreign-owned private property, it has allowed itself to be firmly associated with the action of its predecessors.
In doing so, Attorney General Justin Simon could well have temporarily, if not permanently, shattered Antigua & Barbuda’s fragile sovereign credit rating.
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