The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The FNM and Baha Mar creditors were yesterday urged by a well-known QC to use Judicial Reviews and other legal methods to challenge both the Government’s agreement with the Chinese and its sealing by the Supreme Court.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that there were several potential legal recourses open to those wishing to pierce the veil of secrecy placed around the deal to restart, and complete, Baha Mar’s construction.

A veteran of numerous successful challenges to previous deals struck between the Government and foreign developers, Mr Smith said the Christie Cabinet did not have the lawful authority to give away Crown/Treasury land, and the multitude of tax concessions, promised to the China Export-Import Bank and China Construction America (CCA).

He argued that only Parliament, and not the Government, had the power to grant land and tax incentives to developments such as Baha Mar.

Yet the Christie administration had failed to seek Parliament’s approval for the Baha Mar agreement before concluding and announcing it, which Mr Smith suggested meant it had no basis in law.

“The Cabinet cannot hide the granting of concessions, and the disposal of Bahamian assets, from the Bahamian taxpayer,” Mr Smith told Tribune Business.

“At the end of the day, the Crown Land and money in the Treasury belongs to the Bahamian citizens, and not the Cabinet’s to do with as it pleases.

“I would urge anyone so inclined, including the Official Opposition (FNM), to launch a Judicial Review challenging the legality of the [Baha Mar] agreement entered into on the basis that it is ultra vires for the Cabinet to do so.”

Mr Smith said Judicial Review was an especially valuable tool in the case of Baha Mar. Once the Supreme Court gave permission for such an action to be brought, it would impose an obligation on the Government “to make full and frank disclosure” of all related documents.

“Any taxpayer can bring a Judicial Review of the agreement,” Mr Smith told Tribune Business, “and can, by discovery in the Judicial Review process, force the Cabinet to provide all the documents so that the court can scrutinise whether this is a legal agreement in accordance with the constitution.

“Right now, this agreement is subject to Judicial Review because it’s ultra vires of Cabinet powers. The constitution does not give the Cabinet or any minister the legitimate power to enter into this kind of agreement.”

Mr Smith said the Government should have first placed a draft of the Baha Mar agreement before Parliament, so that the legislative branch of government could scrutinise it and give its approval, before signing it.

“In the Baha Mar matter, Cabinet should have said they had entered into a draft agreement with the contractor and the developer, that these were the proposed terms, and go to the legislative branch responsible for tax concessions and get its authority to enter into the agreement,” he added.

The Callenders & Co partners added that he was also bewildered by the request from Baha Mar’s receivers, backed by the Government, for the Supreme Court to place all documents related to an agreement negotiated on the Bahamian people’s behalf under seal.

“In addition to the Judicial Review, anyone who has an interest in the current [Baha Mar] provisional liquidation process, either as a creditor, developer or some other way of being joined as an interested party, can seek disclosure of those documents to protect their interests,” Mr Smith added.

He argued that the FNM needed to stand up and take the lead in challenging the Baha Mar agreement through the courts, unless the Christie administration soon became more forthcoming.

“It is the job of the Official Opposition to hold the Government accountable and launch proceedings,” Mr Smith said, calling on it to stand up for the interests of the Bahamian public and creditors.

The ‘sealing’ of Supreme Court files is not unusual, and is often done to protect sensitive personal, financial and commercial information from getting out into the public domain, where it might jeopardise both the interests of justice and the parties involved. Tribune Business is even aware of one matter where the case file was ‘sealed’ to prevent persons tampering with the records.

But in Baha Mar’s case, Mr Smith instead argued that details of the Government’s agreement with the two Chinese state-owned entities should have been made public, and not sealed, on the grounds that the Bahamian people’s assets (land and tax revenues) were involved.

Both the China Export-Import Bank’s court-approved receivers, Deloitte & Touche, and the Government have argued that there were sound reasons for obtaining the Supreme Court Order to ‘seal’ all details of the construction completion agreement.

Raymond Winder, Deloitte & Touche(Bahamas) managing partner, said the move was sparked by the need for “commercial confidentiality”.

The Government, for its part, added that the sums of money involved - coupled with the sensitivity of ongoing negotiations with both the Chinese and potential Baha Mar buyers - made it prudent to shroud the agreement in secrecy.

A third explanation came from Wayne Munroe QC, who is representing the Gaming Board and other government creditors of Baha Mar, who argued that the ‘sealing’ was essential to prevent the original developer, Sarkis Izmirlian, from seeking to sabotage any resolution.

Mr Smith, though, blasted: “You can’t govern in secrecy. That’s not legally permissible in our constitution. We are not a Prime Ministerial dictatorship under the law.

“We are a Westminster model of constitutional accountability, and the problem in the Bahamas is that very rarely is the executive held to account.”