Counsel for the Guyana government Dr Fenton Ramsahoye QC is in the United Kingdom to ask Professor Brigette Stern, the sole arbitrator in the dispute with Booker PLC, to put an end to its claim for UK6.7 million pounds in circumstances in which it cannot be revived against Guyana.
Last week the board of directors of the Big Foods Group, a large conglomerate and supermarket chain with annual sales of over UK 5.5 billion pounds, which acquired Booker PLC and took over the claim previously filed by Booker announced that it was abandoning the claim. With interest and costs Guyana would have been faced with meeting a bill amounting to some UK15 million pounds.
Prior to its acquisition by the Big Foods Group, the debt was treated in the Booker accounts as a bad debt.
A hearing before Professor Stern was scheduled for March 31 at which time both sides would have made formal presentations of their case.
The announcement came in the wake of a protest demonstration organised by the Jubilee Research Group in front of one of its supermarkets in Clapham, South London where there is a large Guyanese community. The demonstration led to customers threatening to boycott the group's supermarkets all over Britain.
Booker sought to recover the money under the 1989 Bilateral Investment Treaty (BIT) between Guyana and the United Kingdom, to which it was not a party, but refused to be bound by the Guyana -United Kingdom Debt Relief Agreement on the ground that it was not a party to it. Guyana's contention was that the agreements bound both countries in international law.
Booker PLC filed an arbitration claim in 2001 to the International Centre for the Settlement of Investment Disputes, an organisation of the World Bank after the Cheddi Jagan administration rejected an agreement the Hoyte administration had entered into with Booker PLC. That agreement provided for the monies due on the promissory notes for UK 10 million pounds that had been issued as compensation for the 1976 acquisition of the Booker assets, then valued at UK19.5 million pounds, to be reinvested in a privatised GUYSUCO.
As a result of Jagan's abrogation of that agreement, Booker PLC asked for payment on the promissory notes but the government responded that it would deal with the notes under the Paris Club arrangements, meaning that it would seek relief. Booker's response was that it was not a party to the Debt Relief Agreement made with the United Kingdom and it asked for full payment of the outstanding UK 6.7 million pounds plus interest.
The Jagan administration refused payment despite Booker's demands.
In its arguments Booker claimed that its assets were expropriated in 1976 and it was entitled to compensation. It complained too that it had no recourse to the Privy Council to which appeals were stopped in 1973.
Guyana's response to this was that the 1976 takeover was not an expropriation as there was an agreement signed by both parties It accepted that the promissory notes had been issued but contended that there could be no legal proceedings for recovery as they were not authorised by the Guyana Parliament which was not involved in the agreement or the issue of the notes. It said that the Ministers who issued the notes made the agreement but the executive did not take the issue of the notes to the parliament for approval.
Dr Ramsahoye explained that if this had been done all the notes would have been payable but no money bill was passed as required by the 1966 constitution to create a charge on the Consolidated Fund. What happened, he submitted, was that sums were appropriated in the annual budget for the payment of the notes for individual years.
Alternatively, Guyana's case was that even if enforceable though not sanctioned by the Parliament the monies recoverable were subject to debt relief, citing the 1989 BIT and the Guyana-UK Debt Relief Agreement, which provides that in return for debt relief Guyana would not treat any of its creditors more favourably than it treats the United Kingdom. Under the Guyana-UK Debt Relief Agreement Guyana enjoys 76 per cent debt relief from the UK and claimed the same from Booker PLC.
Booker's response was that it was not a party to the Guyana-UK Debt Relief Agreement and as such was not bound by it.
Guyana's contention was that Booker PLC could not seek relief under one agreement binding in international law while ignoring the provisions of another agreement that was equally binding.
It also argued against the payment of interest being claimed on the outstanding sums on the grounds that interest is regulated by domestic law and cannot be given except where there is an agreement on the face of the notes requiring interest to be paid. The notes did not require payment of interest when they were issued in 1976.