High Court blocks T&T bank from claiming US$20M lodged in escrow account

Attorney General & Legal Affairs Minister Anil Nandlall, SC

The Government of Guyana has scored an important victory against the attempts by CLICO Investment Bank Limited (CIB) to obtain US$20 million lodged in an escrow account, with the High Court not only denying their request, but barring them from filing similar applications without the court’s leave.

The judgement was handed down by Justice Navindra Singh, who dismissed CIB’s judicial review against the Registrar of Deeds.

CIB, registered in the Republic of Trinidad and Tobago (T&T), had claimed it is entitled to the US$20 million by virtue of an agreement between Bosai Minerals Guyana Services and Bosai Minerals Guyana Group Inc. However, Attorney General and Minister of Legal Affairs Anil Nandlall, SC., who appeared on behalf of the Registrar of Deeds, argued in his submissions that Section 330 of the Companies Act prevents companies not registered in Guyana from maintaining legal proceedings locally.

Section 330 reads, “An external company that is not registered under this Act may not maintain any action, suit, or other proceeding in any court in Guyana in respect of any contract made in whole or in part within Guyana in the course of, or in connection with, the carrying on of any undertaking by the company in Guyana.”

Since this is the fifth time CIB has unsuccessfully instituted legal proceedings in Guyana’s courts, Nandlall also made an oral application that CIB be barred from instituting a sixth such proceeding.

“The Attorney General argued that the Registrar of Deeds, though represented by the State, does not have inexhaustible resources to defend these multiple unmeritorious challenges being filed against her; and that the Registrar is entitled to the protection of the Court in respect of these abusive applications filed by CIB,” a statement from the AG Chambers has said.

“The Attorney General further submitted that any similar further proceedings would amount to an abuse of the court’s process, and invited the Court to protect its process from further abuse by making appropriate stay orders.”

The AG’s application was granted, with Justice Singh ordering CIB to pay $500,000 in costs, and that CIB be barred from instituting any further applications before the High Court of Guyana, unless leave from the court is obtained, and until all the costs awarded against CIB to the Registrar of Deeds in all the matters are paid.

In addition to Nandlall, the Registrar of Deeds was represented by Assistant Solicitor General Shoshanna Lall, and State Counsel Laurel Dundas and Shania Persaud. Meanwhile, CIB was represented by Attorney-at-Law Nikhil Ramkarran of the law firm of Cameron & Shepherd.

It was pointed out by the AG Chambers that when CLICO collapsed in 2009, the Guyana Government took on the responsibility of compensating local policyholders. As such, the AG Chambers made it clear that court action would be filed for the state to claim the US$20 million.

The Government of Guyana intends to file fresh legal proceedings to claim these monies as compensation for monies paid out by the Government to creditors of CLICO Life and General Insurance Company (South America) when that company collapsed in 2009. CIB is a subsidiary of that company,” the AG Chambers said.

Colonial Life Insurance Company (CLICO) is a T&T financial company that had policyholders throughout the region. When CLICO experienced a region-wide financial meltdown in 2009, many policyholders in various Caribbean states were unable to receive the monies they had invested at face value.

CLICO Guyana had approximately $6.9 billion invested in the regional insurance company when it collapsed. Among the local investments was $5.2 billion by the National Insurance Scheme (NIS).

In Guyana’s case, the Government of the day committed to return every depositor’s money at face value. At the time, the Government had seized local properties from CLICO in Guyana to help pay policyholders, after it became clear that the regional insurance giant was in dire financial straits and was unable to return monies to all its depositors.

Reports indicate that some 7744 policyholders were paid a total of $4.1 billion. Additionally, the Guyana Government received a $15 million grant from Trinidad and Tobago to assist with the repayment.