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UNITED STATES COURT OF APPEALS 1 FOR THE DISTRICT OF COLUMBIA CIRCUIT 2 - - - - - - - - - - - - - - - X 3 : BCB HOLDINGS LIMITED, ET AL., : 4 : 5 Appellee, : : 6 v. : No. 15-7063, et al. : 7 GOVERNMENT OF BELIZE, : : 8 Appellant. : : 9 - - - - - - - - - - - - - - - X Tuesday, April 19, 2016 Washington, D.C. 10 11 The above-entitled matter came on for oral argument 12 pursuant to notice. 13 BEFORE: 14 CIRCUIT JUDGES ROGERS, GRIFFITH, AND KAVANAUGH 15 16 APPEARANCES: 17 ON BEHALF OF THE APPELLANT: 18 JUAN C. BASOMBRIO, ESQ. 19 20 ON BEHALF OF THE APPELLEE: 21 LOUIS B. KIMMELMAN, ESQ. 22 23 24 25 Deposition Services, Inc. 12321 Middlebrook Road, Suite 210 Germantown, MD 20874 Tel: (301) 881-3344 Fax: (301) 881-3338 [email protected] www.DepositionServices.com C O N T E N T S ORAL ARGUMENT OF: PAGE Juan C. Basombrio, Esq. On Behalf of the Appellant 3; 36 Louis B. Kimmelman, Esq. On Behalf of the Appellees 12 PLU 3 1 P R O C E E D I N G S 2 THE CLERK: Case No. 15-7063, et al., BCB Holdings 3 Limited, et al. v. Government of Belize, Appellant. Mr. 4 Basombrio for the Appellant; Mr. Kimmelman for the 5 Appellees. 6 JUDGE ROGERS: Good morning. 7 ORAL ARGUMENT OF JUAN C. BASOMBRIO, ESQ. 8 ON BEHALF OF THE APPELLANT 9 MR. BASOMBRIO: Okay. This is another case that 10 represents the problem that Belize is facing, we have 11 companies that don't want to pay their taxes, and they're 12 coming to the United States by slapping our arbitration 13 clause on secret agreements with the Government, and they're 14 hoping that the Courts here ignore all that and just confirm 15 it under the New York Convention. 16 In this case you have the CCJ, the Caribbean Court 17 of Justice, the CCJ was established after the year 2000 by 18 50 nations of the Caribbean to act as their Supreme Court. 19 Before that appeals from the Supreme Court of Belize or the 20 Court of Appeals were taken to the Privy Council in the 21 U.K., the problem with that was that the Privy Council was 22 always biased in favor of the British, which were the former 23 colonists of all of these different countries in the 24 Caribbean, so this county said enough of that, we're going 25 to have our own Supreme Court that's going to make decisions PLU 4 1 for us. 2 Now, here, the CCJ has looked at the agreement, 3 let's just talk a second about the agreement, what's the 4 agreement in this case? The former Prime Minister of Belize 5 signed a confidential agreement with these companies who are 6 controlled -- 7 JUDGE GRIFFITH: Now, am I right that Belize 8 didn't make any of those argument, didn't make this argument 9 at the arbitration agreement, didn't show up at the 10 arbitration agreement, right? 11 MR. BASOMBRIO: Belize did -- 12 JUDGE GRIFFITH: At the arbitration? 13 MR. BASOMBRIO: Correct, they did not go. 14 JUDGE GRIFFITH: Why? 15 MR. BASOMBRIO: Because the agreement wasn't 16 authorized. 17 JUDGE GRIFFITH: I mean, if we're going to get 18 into off the record stuff tell me that, why didn't they -- 19 MR. BASOMBRIO: I'm sorry? 20 JUDGE GRIFFITH: If we're going to get into things 21 that aren't in the record why don't you tell me why didn't 22 they contest that argument there? Isn't that the place to 23 make the argument? 24 MR. BASOMBRIO: No, it's not the place, because 25 the New York Convention provides the public policy defense, PLU 5 1 so it can be made in connection with the New York 2 Convention. Also, that was an unauthorized agreement signed 3 by -- 4 JUDGE GRIFFITH: And wasn't there a later action 5 in the United Kingdom to enforce the award, and wouldn't 6 that have been a place to make the argument, as well, but 7 didn't make it there? This is, you've had two chances to 8 make this argument, now you're making it here on the third 9 time. 10 MR. BASOMBRIO: We didn't, Belize could not have 11 gone and participated in the arbitration because this was an 12 illegal agreement signed by the Prime Minister of Belize. 13 JUDGE GRIFFITH: Yes, you go to the arbitration 14 and say this is an illegal agreement, right? 15 MR. BASOMBRIO: Well, no, because then you have 16 given effect to the arbitration clause, and you have 17 recognized that sort of tactics. Here you have the Prime 18 Minister of Belize that signs an agreement with a secrecy 19 clause that he's going to guarantee a company owned by his 20 biggest campaign contributor, Lord Ashcroft, the Deputy 21 Chairman of the Conservative Party in the U.K., the 22 Government of Belize is guaranteeing him that he's going to 23 make 50 percent. 24 JUDGE GRIFFITH: According to the New York 25 Convention we're quite limited, aren't we, in terms of the PLU 6 1 defenses we can consider. 2 MR. BASOMBRIO: Correct. 3 JUDGE GRIFFITH: There are seven defenses, right? 4 MR. BASOMBRIO: Correct. 5 JUDGE GRIFFITH: And the only one that you cited, 6 I think, is the public policy defense, right? 7 MR. BASOMBRIO: Correct. 8 JUDGE GRIFFITH: Okay. 9 MR. BASOMBRIO: Correct. And I think we fit 10 squarely within the public policy defense. 11 JUDGE KAVANAUGH: And why is that? 12 MR. BASOMBRIO: Let me explain why. There are 13 countervailing public policies of the United States that 14 would be violating by giving effect to this award, and 15 giving effect to this agreement, one is the significant 16 public policy against government corruption overseas. The 17 Supreme Court -- 18 JUDGE KAVANAUGH: All right. But a lot of -- I 19 guess I'm worried about containing that principle because a 20 lot of contractual agreements are going to be alleged to be 21 corrupt, and how are we supposed to know in deciding whether 22 to enforce an arbitration award how are we supposed to get 23 into that? 24 MR. BASOMBRIO: Well, the CCJ has held that it is 25 corrupt, that it violates core constitutional separation of PLU 7 1 powers principles, that the Prime Minister didn't have that 2 authority, that it violates core principles of democracy 3 throughout the Caribbean. The language of the CCJ decision 4 is extremely strong, so this is not just every case, you 5 have a regional court saying this is a corrupt agreement, we 6 have the Supreme Court of the United States in Pimentel 7 acknowledging the existence of a significant, quote, 8 unquote, policy of combating international corruption. And 9 so, this would be a case where you would hold that the 10 countervailing policy outweighs the policy in favor of 11 arbitration, otherwise, Judge Griffith, what you have is you 12 open the door for corrupt politicians to slap an arbitration 13 clause in the Caribbean, and you're sending it back to 14 England, back to the LCIA where the stack is going to be 15 against the Belizean interests. Other principles that are 16 countervailing policies are, again, separate -- 17 JUDGE GRIFFITH: Why do you say it would be 18 against the Belizean interests to be before an arbitrator in 19 London? 20 MR. BASOMBRIO: Because it's being administered by 21 the London Court of International Arbitration, that the 22 forum is in London, that arbitration will be subject to 23 British law, et cetera. Let's think about it if that's 24 something that would have happened in the United States, 25 let's say the head of the EPA entered into, or the IRS PLU 8 1 entered into some sort of agreement, would the United States 2 want that to be adjudicated in London, or in the United 3 States? We certainly would want to judge the actions of our 4 own government officials in the United States, and that's 5 why there is a public policy defense in the New York 6 Convention. 7 Let me turn to statute of limitations. The 8 Judges, the District Court's decision is internal 9 inconsistent because she says on the one hand only the 10 defenses on Article 5 are available -- 11 JUDGE KAVANAUGH: On the corruption point, one 12 more thing -- 13 MR. BASOMBRIO: Yes. 14 JUDGE KAVANAUGH: -- are there any other cases 15 that have recognized that as a basis for setting aside an 16 arbitration award? 17 MR. BASOMBRIO: No, there's always a case of first 18 impression. This is a case of first impression. Although I 19 will say that the State Department, if you look at their 20 website, and we cite it in our papers, they recognized that 21 there was corruption in the administration of Prime Minister 22 Moussa. 23 JUDGE KAVANAUGH: Okay. 24 MR. BASOMBRIO: So, turning to statute of 25 limitations, here the basis of the statute of limitations PLU 9 1 tolling finding is the law, the criminal law related to 2 injunctions overseas, that cannot possibly be the basis 3 because there was no injunction entered against this 4 Defendant. So, that decision was in error. 5 Second, there was no chilling effect, because as 6 you know, Judge, they went to the U.K, and they enforced the 7 award in the U.K., they weren't chilled in the U.K., they 8 could enforce the award in the U.S.