The High Court yesterday rejected an application from CLICO Investment Bank to initiate proceedings to tap US$20m held in escrow following the collapse of its parent company here in 2009 which left many Guyanese investors stranded.
The government here has also signalled it intends to pursue fresh legal action to claim these monies as compensation.
A release from the AG’s Chambers follows:
HIGH COURT BARS CLICO INVESTMENT BANK LTD. FROM INSTITUTING FURTHER APPLICATIONS TO CLAIM $20M USD LODGED
On the 5th July 2024, the Honourable Justice Navindra Singh dismissed with costs in the sum of $500,000.00, a judicial review application filed by Clico Investment Bank Limited (CIB) against the Registrar of Deeds. The Court also barred the company from instituting similar further applications in the High Court of Guyana without leave of the Court.
Justice Singh upheld the submissions of the Honourable Mohabir Anil Nandalall, SC, MP, Attorney General & Minister of Legal Affairs who relied on Section 330 of the Companies Act of Guyana, which imposes a bar on external companies that are not registered from maintaining legal proceedings in Guyana. Section 330 provides:
“(1) 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.”
CIB, being a company registered in Trinidad and Tobago, and not so registered in Guyana, could therefore not maintain any legal proceedings in Guyana in the absence of registration.
CIB, in its Application, sought a number of Orders against the Registrar of Deeds, including, that the said proceeds of the certain debentures between CIB and Bosai Minerals Guyana Services Inc. and Bosai Minerals Guyana Group Inc., which were lodged in the Deeds Registry, be paid out to CIB and an Order that the Registrar of Deeds has committed misfeasance in public office by continuing to hold the proceeds of the debentures.
The Attorney General took a preliminary objection invoking section 330 of the Companies Act contending that CIB has no capacity to institute or maintain the proceedings and similarly, the Court has no jurisdiction to entertain the proceedings. The court ordered both sides to file written submissions. Yesterday, Justice Singh ruled on those submissions upholding the Attorney General’s objections and dismissing the case.
After the Court’s ruling, the Attorney General also made a further oral application before the Court that CIB be barred from instituting further proceedings in the High Court of Guyana, given that this is the fifth unsuccessful application instituted by CIB against the Registrar of Deeds.
The Honourable 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. 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.
After considering the Attorney General’s oral application and submissions made by Counsel for CIB, Justice Singh further ordered (i) CIB to pay $500,000.00 in costs, and (ii) 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.
This Application filed by CIB, is the fifth attempt to have approximately US$20,000,000.00, which is currently lodged in an escrow account at the Deeds Registry, released to the company. CIB alleges that it is entitled to these monies by virtue of contracts which were made with the then Bosai Minerals Guyana Services Inc. and Bosai Minerals Guyana Group Inc.
After the catastrophic collapse of Clico Life and General Insurance Company (South America) in 2009, billions of dollars deposited with Clico by ordinary Guyanese, and billions invested in that company by the National Insurance Scheme, were lost. The then Government of Guyana compensated persons who suffered the losses.
Over the last two years, four (4) previous proceedings were filed by CIB against the Registrar of Deeds in an effort to retrieve these monies. These proceedings included actions seeking to commit the Registrar of Deeds to prison under the Debtors Debt and for contempt of court for failing to pay over these monies. Each of these proceedings was dismissed by different judges of the High Court who upheld legal technical objections of different types raised by the Attorney General.
The Registrar of Deeds was represented by the Attorney General, Mohabir Anil Nandlall SC MP, Shoshanna V. Lall, Assistant Solicitor General, Laurel Dundas and Shania S. Persaud, State Counsel. CIB was represented by Mr. Nikhil Ramkarran, Attorney-at-Law of Cameron & Shepherd.
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.