In the continuing court saga surrounding Clico’s (Guyana) immovable assets Appeal Court judge, Justice B.S Roy on Friday granted a stay of the sale of the assets, blocking permission to sell as previously granted by the Chief Justice.
The assets have been at the centre of an intense court battle that erupted some three weeks ago when Clico’s Judicial Manager Maria van Beek approached Acting Chief Justice Ian Chang, through her attorney, seeking permission to sell the assets and have the revenue placed in the statutory fund for the benefit of policyholders.
Permission to sell was initially granted, but Justice Chang subsequently granted an interim stay on the order following strong objections by the company. He later approved the sale but varied the order to include strict adherence to court supervision of the sale.
Clico (Guyana) then approached the Appeal Court, through its attorneys, saying that it was dissatisfied with the decision of the acting Chief Justice and sought to have the order reversed. Clico detailed several grounds in its notice of appeal, but emphasized that it was not afforded the statutory right to be heard by virtue of Section 72 of the Insurance Act of 1998.
The company contended that Justice Chang erred in law because the Judicial Manager has no authority, power or jurisdiction to sell or otherwise dispose of any of the properties, and argued that van Beek’s final recommendation to sell the assets amounts to a pre-judging of the status of the statutory fund, adding that the status of the fund is an issue for the court’s ultimate determination in the original petition matter.
Clico restated its earlier argument that should the assets be sold the company would suffer substantial loss and hardship. The company said the Judicial Manager promptly advertised the sale of the assets several hours after the interim stay by the Chief Justice was removed.
Justice Chang’s initial order on June 11 approved the sale of Clico immovable properties and allowed also for the revenue earned to be placed in the statutory fund for the benefit of policyholders. The order had also allowed for proceeds from the sale to be put away to meet current and future obligations of the insurance company.
The permission to sell off Clico’s assets had been sought by van Beek, who has advised in a report to the court that the company is now in a state where it is to be wound up, adding that “liquidation of the company may be regarded as the option most advantageous to the general interests of the policy holders”.
But attorneys for Clico (Guyana) had strongly argued against any sale of the company’s properties and insisted that the insurance company is still in a position to operate some lines of business. The attorneys have argued that van Beek closed all of its business offices without a single attempt to operate any line or class of insurance business.
The Judicial Manager has told the court that the company suffered a severe blow with the US$34 million “badly invested” in the Bahamas, and a number of policy surrenders earlier this year. She also denied claims that the company had huge sums of liquid cash.
She said also that the proposal to sell the company’s assets was in the interest of policyholders and that such is the primary objective of judicial management as set out in the Insurance Act 1998.
Clico’s High Court and Appeal Court matters continue.
