June 18, 2009

CCJ Reserves Decision in Original Jurisdiction Case

June 17, 2009 in Local News
Guyana admits breaching treaty

The Caribbean Court of Justice (CCJ) has reserved judgment in the closely watched case of Trinidad Cement Ltd (TCL) and TCL Guyana Incorporated (TGI) against the Guyana Govern-ment over the application of the Common External Tariff.

Guyana conceded on Monday at the commencement of the two-day hearing in Trinidad and Tobago that it was wrong for breaching the Revised Treaty of Chagua-ramas by unilaterally suspending the Common External Tariff (CET) on cement imported from countries outside of Caricom, and noting too that it was making “no justifications for doing so”.

But, according to the audio of the proceedings, when asked whether Guyana is still in breach, lead Counsel Keith Massiah, SC. replied, “I cannot say that the waiver is not in place and I have no information that COTED (Caricom Council for Trade and Economic Development) was approached for a waiver”.

Through its admission of wrongdoing the government here faces the issue of compensation as TCL/TGI are claiming some US$2.5M in damages. The case is also seen as critical as it is the first test of the regional court in its original jurisdiction – interpretation of the Treaty of Chaguaramas – as distinct from its appellate role.

Senior Counsel Dr Claude Denbow, who filed the application on behalf of the cement companies, argued that the case is a fundamental one because it focuses on how the CCJ will treat a breach of the regional treaty, adding that it cuts to the core of the issue of “whether one member state will be allowed to tear up the treaty and treat it in an arbitrary and whimsical fashion”.

Dr. Denbow said that Guyana still refuses to implement the CET after being requested to do so. He contended that Guyana’s actions set a dangerous precedent for the sanctity and continuing viability of the treaty. He said too that Guyana showed total contempt for the treaty.

Massiah had conceded on Monday that Guyana should have approached COTED prior to suspending the CET. But, he argued that TCL and TGI were unable to meet the demands of local distributors, adding that “the inability to do so has continued”.

But he pointed to the independent cement audit report released by COTED late last year, which showed that TCL was unable to meet the requests of distributors in Guyana up to the period November 2008, and respectfully submitted that the court pay some consideration to the findings.

Counsel also pointed to the sworn evidence of Guyana’s Foreign Trade Director, identified in court as Mrs. Stephens, who testified that a monitoring unit within the ministry routinely checks in with distributors here as well as documents their complaints.

Massiah said further the matter would not have reached the court if TCL had the “ability to meet the demands of Guyanese distributors”.

BackgroundTCL and TGI had accused the Guyana government of breaching the Revised Treaty of Chaguaramas by unilaterally suspending the CET on cement imported from countries outside of Caricom and was later granted leave to sue the government here after approaching the CCJ.
TCL and TGI alleged a breach by Guyana of the provisions of Article 82 of the revised treaty under which Guyana is obliged to establish and maintain a Common External Tariff (CET) on cement imported into Guyana from outside of Caricom. The CET is incorporated into the laws of Guyana.

According to their submission, TCL and TGI alleged that Guyana is required to establish and maintain a CET in respect of all goods which do not qualify for community treatment in accordance with plans and schedules set out in the relevant determinations of COTED; that the CET on cement is imposed at the rate of 15% on imports of cement from third states as reflected in the First Schedule of the Guyana Customs Act Chapter 82:01; that the imposition of the CET on imports of cement into Guyana extra-regionally is of great commercial benefit to them because of the protection afforded to their products; and that when the CET is imposed TCL and TGI enjoy a competitive advantage over imports which do not qualify for community treatment in accordance with the treaty.

Though they confined their allegations of not enjoying such a competitive advantage to the period from January 2007 and continuing even though the suspension of the CET commenced before January 2007, they said that at present they do not enjoy such a competitive advantage because of the decision of the Guyana government to suspend the implementation of the CET.
TCL and TGI alleged too that the revised treaty provides for COTED to authorise an alteration or suspension of the CET by a member state but the government sought no permission for this but Guyana was allowing the importation of cement from extra-regional sources without paying the CET as mandated by the relevant provisions of the revised treaty.

Retired Attorney General Doodnauth Singh submitted then that TCL and TGI were guilty of abusing their dominant position in the market and the court needed to protect consumers within Caricom; and that throughout Caricom there were complaints about the inability of TCL to supply the Caribbean market and in the period between 2001 – 2007 CET waivers were sought and obtained from COTED by Suriname, T&T, Jamaica and the member countries of the Organisation of Eastern Caribbean States (OECS).

The CCJ panel of judges presiding in the case comprised, President of the court, Justice Michael De La Bastide and Justices Rolston Nelson, Duke Pollard, Adrian Saunders, Desiree Bernard, Jacob Wit and David Hayton.

No comments: