The issue of the negotiated settlement

Aug 31, 2015 Features / Columnists, Peeping Tom

The Guyana Bar Association and the Guyana Women Lawyers’ Association have reportedly come out strongly against statements emanating from within the Guyana Manufacturing and Services Association (GMSA) urging the government to not go ahead and pay a multi-billion-dollar award made by the Caribbean Court of Justice in favour of a company operating in Guyana.
It is also reported that this issue is causing deep divisions within the Guyana Manufacturing and Services Association. There is a reported rift within the GMSA over this issue.
The two legal groupings have now thrown their hats into the fray and are urging the government to ignore the calls for the judgment not to be paid. These groups are in favour of government complying with decisions of the Courts.
The issue, however, has nothing to do with Government not honouring a decision of the Court. The government, in fact, is the one that agreed to go ahead with negotiations with the company after the PPP did not pay the award.
There was even a suggestion during the time of the PPP. That suggestion was that since the Caribbean Court of Justice did not have a mechanism to enforce its decisions, the then government could have simply not paid without any consequences.
Perhaps, the CCJ would have held the government to be in contempt but if there is no mechanism to enforce contempt proceedings, what would be the likely consequences? This is one argument against settling the judgment.
The two legal organizations are interested in upholding the principle that courts awards should be honored. Fair enough!
But the issue here is not about honoring the Court award. The issue is about the negotiated settlement that was arrived at between the government and the company. The government did not simply get up one morning and write a cheque to settle the judgment. According to reports in the press, the government entered into negotiations with the company.
In effect, therefore what we have is an agreement between the two sides that was negotiated. This allows for a lesser sum to be paid than the original award. Cheers for the government!
Well, not so quick according to a statement which we are told emanated from within the Guyana Manufacturers and Services Association. They are claiming that the sum should not be paid because of some other liability that emerged as a result of disclosures during the case.
This issue of disclosures being made in a court case and being used for purposes outside of the legal process presents an ethical dilemma. Many years ago, in a civil case between two companies, it was disclosed during the trial that one of the parties may have submitted a false income tax return. This disclosure had no bearing on the material questions involved in the case. But it was used by political elements to go after one of the individuals in the case even though the Court had merely offered its opinion on the tax issue.
The person concerned was never charged for that tax offence. Yet so much pressure was brought on the man that he was forced to seek refuge in another Caribbean country. He was lynched on an opinion that was not tested. The real crime he had committed was not the tax offence which was never lawfully established. His crime was that he crossed the political floor from the PNC to the PPP and the former never forgave him.
One has to be careful when cherry-picking parts of judgments and using them to make assumptions. If during the CCJ trial there were issues of tax compliance that emerged, this should not be the basis of denying paying an award. But it can influence a negotiated settlement of the award.
The government of Guyana therefore needs to explain if during the course of its negotiations with the company whether it factored into those negotiations the issue of the possible outstanding tax liability.
This is what the government has to answer to. In light of the information that the government had at its disposal, why did it not press in its negotiated settlement for the company to honor all outstanding tax liabilities before the judgment was paid.
If I owe you billions of dollars but you also could possibly owe billions, then that surely must affect what is finally agreed upon. Yes? No? Whatever!

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The issue of the negotiated settlement

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