July 08, 2008

CCJ Reserves Ruling Under Original Jurisdiction - TCL/TGI Case

TCL/TGI case against Guyana gov’t -CCJ reserves ruling on special leave to sue
By Miranda La Rose
Source Stabroek News
July 7, 2008

Arguments in the application to the Caribbean Court of Justice (CCJ) by Trinidad Cement Limited and TCL Guyana Limited (TGI) to be granted special leave to commence proceedings against the Guyana government have been heard but a ruling has been reserved for a later date.

At the three-hour hearing at the CCJ in Port of Spain, Trinidad and Tobago on Monday, Queen’s Counsel Dr Claude Denbow presented the case for TCL (the parent company) and TGI while Guyana’s Attorney General Doodnauth Singh argued against the CCJ granting special leave to commence the hearing. CCJ President Michael De La Bastide presided over the court

Doodnauth SinghTCL/TGI are asking that their matter, in which they are claiming losses due to the Guyana government’s unilateral waiver of a 15% Common External Tariff (CET) on cement imports, be dealt with in accordance with Article 222 of the Revised Treaty of Chaguaramas and Part 10 of the Caribbean Court of Justice (Original Jurisdiction) Rules of 2006. It is the first time that the regional court has been approached in its original jurisdiction.

In their application TCL and TGI said that under Article 82 of the Revised Treaty they are entitled to protection under the Common External Tariff (CET). Their written submission said they “have been prejudiced in the enjoyment” of their rights by the government.

They also said that T&T as the contracting party was entitled to espouse TCL’s claim but had not done so and the same was the case in relation to Guyana and TGI. Appended to the application was a letter by TCL to the T&T Attorney General Bridgid Anissette-George, dated February 20, 2008, asking for permission for TCL to pursue the claim on its own behalf or for Port of Spain to forward the claim on its behalf. Anissette-George replied on March 4, 2008 with a three-line letter that said the matter had been duly noted.

In his summary, Denbow said that it was important to note that the issue of public importance was the preservation of the integrity of the Revised Treaty and the TCL was acting in a fashion wholly consistent with the Revised Treaty. He noted that TCL was engaged in substantial cross-border investment, investing over US$10 million in a state-of-the art facility in Guyana on the condition that it would enjoy market access, have the opportunity to expand, produce and supply its products to the Guyana market. The US$10 million investment was part of an overall loan package of US$105 million obtained from the International Finance Corporation in Washington DC to expand and modernize TCL plants in Jamaica, Trinidad and Tobago and Guyana.

He said that the company’s expectation was not made possible because of the steadfast refusal of the Guyana government to implement the CET. After the further suspension of the CET from 2004 to 2006, TCL and TGI approached the government but after not getting any results in 2007 they approached the Caricom Council for Trade and Economic Development (COTED) in November 2007 which suggested that Guyana should once again implement the CET because the supply issue which the country had raised in the past no longer existed. Denbow said that there was total silence on the part of the government and the CET remained in place.

Community law“On what legal authority, one does not know,” he said adding that, “What you have here is a flagrant breach of community law.” In the circumstances, he submitted that as guardians of the Revised Treaty the CCJ ought to intervene to uphold the community law. “That is why I am asking the court to grant special leave to prosecute these proceedings,” he said, noting that correspondence between TCL and TGI to resolve the matter between ministers of the Guyana government and his clients were repeatedly ignored.

He said that the case cries out for the CCJ to intervene in order to protect the integration process of Caricom and to uphold the law between the state and investors under the Caricom agreement.

In defence of the Guyana Government, Attorney General Singh said that Denbow did not define who in terms of nationals was entitled to be heard by the CCJ and the circumstances. No where in his arguments did he establish the issue of management and control but instead referred to the history of the company and its shareholders of which Sierra Trading 9 Cemex SA de CV) held 20% of the shares, the largest in the company.

He said it was significant that when a contracting party alleges a violation between a contracting party and another it was obligatory that they enter into consultations and attempt to arrive at amicable settlement within the provisions of the Revised Treaty and further to take steps to arbitrate in disputes but this was not done.

The absence of consultation and arbitration, he said, were reasons why special leave should not be granted, adding that litigation should be a last resort.
Even though Guyana acted unilaterally in waiving the CET, he said, TCL never objected to the waivers. While the government ought to have imposed the CET, he said that it would appear that because of the difficulty being experienced the GOG implemented the policy on a yearly basis. It was because TCL appreciated their inability to meet the demand that the T&T government never implemented the CET as well, he contended.

With Justices Desiree Bernard and Adrian Saunders noting that there were breaches by the Guyana government and asking why he was using the breaches in his arguments, he explained that it was to show that in spite of them TCL allowed the violations to continue for a year because they could not supply the market.

Vienna Convention
Justice Saunders reminded him that Guyana ratified the Vienna Convention of the Law Treaty on September 5, 2005 which says that “treaties must be fulfilled in the utmost…”Justice Bernard said that whether TCL allowed the violations, the point was that the State of Guyana flouted the treaty obligations and to try to make excuses for an apparent disregard on the basis of TCL or action or inaction was inexcusable.

However, Singh replied that he was not seeking to justify but to rationalise why TCL did not take steps earlier to correct the issue of the CET. “They came late in the day,” he said.
Accepting what was said that the Guyana government should have approached COTED to get the permission to have the waiver implemented, he insisted that he was “attempting to demonstrate that in the interest of justice and for the exercise of its discretion that those factors could be taken into account to determine whether the overall requirements of justice could be utilised in such a way that leave ought not to be granted.”

In closing his arguments, he said that based on a publication he read from, dated May 2, 2008 TCL’s profits should be noted by the courts.TCL and TGI filed their request for special leave on April 3, under Article 211 (d) and 222 of the Revised Treaty of Chaguaramas, which established the Caribbean Community, including the Caricom Single Market and Economy (CSME) and Articles XII (d) and XXIV of the agreement establishing the CCJ.

Once the CCJ hears the case TCL (the parent company) and TGI would be claiming according to the written submissions “compensation from and/or injunctive relief against the Government of Guyana in respect of breach of provisions of the Revised Treaty under which Guyana is obligated to impose and maintain a Common External Tariff on cement imported into Guyana from countries outside the Caribbean Community.”

TCL and TGI are asking the CCJ to declare that the Republic of Guyana, a party to the revised treaty, violated the provisions of Article 82 by failing to implement and maintain the CET of 15% in respect of imports of building cement. They also seek a declaration that as a party to the revised treaty and member state of Caricom, Guyana failed to maintain the CET, violating the right and entitlement of the claimants to the protection of the provisions of the revised treaty.
As a consequence, the claimants feel, Guyana is liable to pay compensation to them for any loss suffered by reason of its conduct. It is also asking the CCJ for an order to direct the government to bring its regime of imports of building cement in conformity with Article 82 of the revised treaty by implementing the CET; and for damages for loss of profits as a direct result of the government’s failure to implement the CET for the period January 2007 to December 2007 and continuing; exemplary damages; an order that the costs of the proceedings be borne by the government of Guyana; as well as such other orders that the CCJ deems fit.

According to the full statement of facts, the first claimant TCL is a limited liability company incorporated under the Companies Ordinance, Chapter 31:01 of the laws of Trinidad and Tobago but it is also registered “as an external company under the Companies Act, No 29 of 1991 of the Laws of Guyana with its registered office at 2-9 Lombard Street, GNIC Compound, George-town, Guyana.

The second claimant, TGI, is a limited liability company, which was incorporated on March 17, 2004 under the Companies Act, No 29, with registered office at Lombard Street as well. TCL holds 80% of the issued capital of TGI and the other 20% is held equally by Toolsie Persaud Ltd and Anral Shipping Ltd.

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