In the wake of a US court ruling in favor of Grenada for its default on loans issued by Taiwan’s state-owned Export Import Bank, a senior official at the bank has reportedly scheduled a visit to the Caribbean country next month.
Earlier this month, Acting Grenadian Prime Minister Nazim Burke, who is also the Grenadian finance minister, was quoted by media in Grenada as saying that he is looking forward to the bank chairman’s visit.
Remarks by bank spokesperson Lin Shui-yung (林水永) contradicted the report. Lin said by telephone yesterday that the bank’s senior officials had no plans to visit.
On June 22, Judge Harold Baer of the US District Court for the Southern District of New York overturned a previous court order under which Taiwan had been allowed to siphon payments owed to Grenada by airlines and cruise ship companies into an escrow account for the past nine months.
Paul Summit, a lawyer of the Boston-based law firm of Sullivan & Worchester, reportedly plans to appeal the judge’s ruling, while the chairman of The Grenada Airports Authority reportedly said the bank has filed an appeal.
However, the news was confirmed by neither the Ministry of Foreign Affairs nor the bank.
The ministry adopted an extremely low-profile approach in dealing with the case and when it referred to questions related to plans to recover the payments in default.
Ministry spokesperson Steve Shia (夏季昌) said the ministry respected the bank’s decision on whether and how to demand repayment according to the terms in the loan contracts because they were “commercial loans.”
An official of the bank, who requested to remain anonymous, said the bank has not decided on whether to appeal against the ruling or to seek out-of-court settlement and reschedule the debts.
How to proceed with the case was not entirely the bank’s decision, the bank official said, adding that the ministry has had “a finger in the pie” since the very beginning when the loans were negotiated.
“Cases like this pertain to the nation’s foreign policy. Commercial loans are simply policy loans in disguise,” the official said.
The bank filed a lawsuit against Grenada in December 2006 after the country, which has failed to repay certain principal installments and interest since April 2004, switched its diplomatic allegiance from Taipei to Beijing in 2005.
Grenada defaulted on four multimillion-dollar loans totaling approximately US$21 million made by the bank between 1990 and 2000.
In early 2007, the bank won a summary judgement against Grenada and has attempted to obtain what was mandated ever since.
A court ruling showed that in December 2010, the bank sought fulfillment of a judgement against Grenada for US$25 million, contempt sanctions of US$10,000 per day based on Grenada’s alleged failure to comply with a court order regarding post-judgement discovery, and an additional US$10,000 in attorneys’ fees.
Yen Chen-shen (嚴震生), a research fellow at the Institution of International Relations of National Chengchi University, suggested the ministry waive the loans in consideration of Grenada’s hardships if the money lent to the country was used for the benefit of its people.