In a bid to recover significant financial losses linked to the collapse of the CLICO Group, the state is seeking to garnish US$20m being held in escrow here for one of the Trinidad group’s subsidiaries, Clico Investment Bank (CIB)
The state’s move follows attempts by CIB to have the money released to it by Guyana’s Registrar of Deeds in accordance with various court rulings.
In a court filing of 11 July, 2024, the Attorney General’s Chambers and CLICO Life and General Insurance Company (South America) Ltd are seeking a declaration that the judgment obtained by the latter in February 2019 against CLICO’s parent company, CL Financial Ltd is enforceable against CIB.
The claimants also want an order substituting CIB as the defendant in place of CL Financial in the High Court action that had been filed by CLICO Life and General Insurance Company (South America) Ltd.
The claimants also want an order permitting CLICO Life and General Insurance Company (South America) Ltd to execute the judgment of 2019 against CIB.
Further, the claimants are praying for an order directing payment to the claimants of any and all monies held by the Registrar of Deeds to the credit of CIB in partial satisfaction of the 2019 judgment.
The claimants are also seeking an order restraining the Registrar of Deeds from paying over to CIB monies being held to the credit of CIB until the hearing and determination of the substantive case.
A series of other orders were prayed for in relation to US$34m which was owing to CLICO Life and General Insurance Company (South America) Ltd when Clico’s parent company CL Financial encountered major problems in 2009 and had to be bailed out by the Trinidad government.
On July 5th, the Guyana High Court rejected an application from CIB to initiate proceedings to tap the US$20m held in escrow following the collapse of its parent company here in 2009.
According to release then from the Attorney General’s Chambers, Justice Navindra Singh dismissed with costs in the sum of $500,000.00, a judicial review application filed by 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.
The release said that Justice Singh upheld the submissions of Anil Nandlall, SC, 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.
This statement from the AG’s Chambers prompted a letter in the July 10 edition of this newspaper from Nikhil Ramkarran, counsel for CIB.
He said: “The main action, filed in 2009, was by Clico Life and General Insurance Company (South America) Limited (the plaintiff and a Guyanese company) against CL Financial Limited, First Citizens Bank and eventually our client, the Liquidator of Clico Investment Bank (all of whom are Trinidadian companies).
“ In 2009, Chief Justice (as he then was) Mr. Ian Chang, S.C. ordered (among other orders) that the money owed to Clico Investment Bank (CIB) be deposited with the Registrar of Deeds to hold until the hearing and final determination of the action. These were monies lent by CIB under two debentures to two Bosai companies. It should be noted that CIB was not then a party to the action. After it learnt in 2014 about the order made by Chief Justice Chang, CIB applied to be added as a party to the case as its financial interests were involved.
“The trial of the substantive action culminated in the dismissal of the claim by Clico Life and General Insurance Company (South America) Limited in June 2019. The order permitting the Registrar of Deeds to collect and hold the monies from the Bosai companies that were owed to CIB was discharged.
“One would have expected that the monies held by the Registrar would be seamlessly paid to their owner, CIB, as there was no longer a court order permitting the Registrar to hold on to monies that did not belong to her or the government. Nevertheless, the Registrar indicated that she required a court order to release the monies.
“Clico Life and General Insurance Company (South America) Limited, appealed to the Court of Appeal, the order in the High Court dismissing its claim against CIB and the other parties. The appeal was dismissed in December 2022. From this time onwards, there has been no case of any kind in existence by anyone against CIB.
“Having regard to the refusal of the Registrar to release the funds that did not belong to her or the government, CIB was forced to file a wholly new action in the High Court seeking an order for the Registrar of Deeds to pay the monies to CIB. The Registrar of Deeds, unusually, vigorously defended this action even though the money was not hers and belonged to CIB.
“In October 2022, after the full and contested hearing, the High Court granted a final order authorising the Registrar of Deeds to pay to CIB the monies that were being held by the Registrar of Deeds that were paid by the Bosai Companies representing what they owed to CIB.
“ The monies were never released to CIB by the Registrar of Deeds despite the explicit discharge of the injunction that authorised her to hold the monies, despite the dismissal of the claim against CIB for that money, despite the explicit order of the High Court authorising her to do so and despite the dismissal also, in December 2022 of the appeal of the High Court orders between Clico Life and General Insurance Company (South America) Limited and CIB and others.
“Since 1 January 2023, there were no orders of court, no laws of Guyana, no claims in court yet to be prosecuted and no appeals that could later result in a reversal of the fact that the monies owed by the Bosai Companies to CIB should have been paid to them. Yet, no monies were paid, despite demands to the Registrar of Deeds. Each application to the court against the Registrar for the monies held by her, which is the property of CIB, has been opposed by the Attorney General on procedural grounds, not on the basis that the monies do not belong to CIB, or to a party other than CIB. Justice Naresh Harnanan and now, Justice Navindra Singh, have upheld these procedural arguments. In the meantime, the Registrar refuses to pay over monies at the request of CIB, the owner of the monies, even though there is no court order in existence allowing her to do so and the original court order that required the monies to be deposited with her has long been discharged.
“CIB will appeal this most recent decision”. Background
One of the Claimants, Clico Life and General Insurance Company (South America) Ltd an insurance company licensed to operate in Guyana, is currently in liquidation. CLICO Investment Bank Ltd., also in liquidation, was previously licensed in Trinidad and Tobago. Both were part of the CL Financial Group, which began to unravel around 2007, leading to the collapse of several entities, including the Claimant.
Between 2008 and 2009, more than US $34,000,000 was allegedly transferred from the Claimant, Clico Life and General Insurance Company (South America) Ltd to CLICO Bahamas Ltd., which subsequently went missing.
