CCJ Delivers Historic Judgment Under its Original Jurisdiction

TCL, subsidiary granted special leave to sue Guyana over cement tariff
Source: Stabroek News

Published: January 16, 2009 in News

In a historic first judgment delivered in its original jurisdiction, the Caribbean Court of Justice (CCJ) yesterday granted special leave to two cement companies to sue Guyana over what they said was the “unilateral” suspension of the Common External Tariff (CET) on cement.

The issue of whether Trinidad Cement Ltd (TCL) and TCL Guyana Incorporated (TGI) qualified as candidates for special leave to bring proceedings before the CCJ went to the core of the court’s jurisdiction, which in addition to being the highest appellate court in the region, also exercises an original jurisdiction by interpreting and applying the treaty which establishes the Caribbean Single Market and Economy (CSME).

TCL 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 sought to obtain special leave from the CCJ to sue Guyana. However, the two companies first had to satisfy certain conditions. They had to establish that they were “persons, natural or judicial, of a Contracting Party”.

Caricom member states who are contracting parties may bring proceedings before the CCJ, but for a person or company to bring proceedings before the court in its original jurisdiction, the party has to get permission from the CCJ, in addition to satisfying the required conditions.

On this issue, according to an executive summary of the judgment, the CCJ panel of judges ruled that the incorporation of a company in a Caricom state (which is a party to the treaty) is enough to qualify the company as a candidate for special leave to bring proceedings. It also ruled that an individual or a company may possibly approach the CCJ to seek relief against the state of which he is a national or any other Caricom state, which is a contracting party.

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.

In the judgment on whether a national of a state party to the treaty can bring an action, the court said it rejected a literal interpretation of the relevant article, Article 222 of the Treaty and took into consideration the policy and objectives of the Treaty as disclosed both in its preamble and its substantive provisions. In the judgment, the Court held that it is possible for an individual or a company to seek relief from the CCJ for breach of a Treaty obligation undertaken by a state whether or not that individual or company is a national of the offending state.

The CCJ also held that on the material facts placed before it the applicants had established at least an arguable case that other requirements for special leave had been satisfied, but emphasized that it was making no “definite finding on those issues which the ultimate success or failure of the proceedings might turn” since the ruling has now cleared the way for the substantive arguments in the case to be heard.

Regional submissions

The CCJ had invited all contracting parties and Caricom to make submissions on the issues before it, that is, whether under Article 222 of the Treaty of Chaguaramas, which pertains to the locus standi of private entities, it is sufficient for a company to be incorporated or registered under the domestic legislation of a contracting party.Secondly, the court also sought submissions on whether Article 222 accords one who is held to be a person, natural or juridical, of a contracting party the right to sue that contracting party.

The court said yesterday that it received submissions from Caricom, Barbados, Jamaica, Trinidad and Tobago and St. Vincent and the Grenadines. Notices for submissions were sent out last July to contracting countries except Guyana.

Originating application

TCL, a limited liability company incorporated under the laws of Trinidad and Tobago and registered as an external company under the laws of Guyana, and TGI, a limited liability company incorporated under the laws of Guyana in which TCL is the major shareholder sought special leave to file an originating application claiming compensation from/and or injunctive relief against the State of Guyana over the non-application of the CET on cement.

Guyana was represented by Attorney General Doodnauth Singh. While the State of Trinidad and Tobago was entitled to appear and was served with a copy of the proceedings it indicated via counsel at the case management conference preceding the hearing that it merely wished to observe the proceedings. The originating application was filed on April 3, 2008 by the Law Offices of Dr Claude Denbow, SC.

Alleged a breachTCL 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 Caricom’s Council for Trade and Economic Development (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.

The two cement companies contended that they fulfilled all the relevant criteria for obtaining special leave “as Guyana has breached a provision of the revised treaty intended to enure to their benefit directly and that they are prejudiced by the breach.”As “nationals” of both Trinidad and Tobago (T&T) and Guyana, they alleged that the government of both countries declined or refused to espouse their claim and as such they sought special leave to seek redress from the CCJ.

On the other hand, Guyana admitted that the country suspended the implementation of the CET on cement and that COTED had not authorised any suspension in respect of the relevant period. The suspension was justified, he submitted, by the critical shortage of the commodity Guyana faced in view of its urgent developmental needs as a “disadvantaged community” in keeping with Article 1 of the revised treaty.

Attorney general Singh submitted 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).

He argued that the right to institute proceedings before the court was a right peculiarly vested in “State Parties” and that judicial review in municipal proceedings would have been the more appropriate course for TCL and TGI to take; and that the bringing of proceedings by one state against the other under the revised treaty may have serious political implications for the continuation and future of Caricom because the revised treaty intends that contracting parties operate as joint partners in Caricom and the CSME and only in the event of a breach of community obligations of the greatest magnitude was it foreseeable that such proceedings would be contemplated by one state against another.

He argued, too, that the applicants must prove that they are “nationals” in terms of the revised treaty, which requires eight different conditions to be met and that the applicants had not met them.

Lastly he argued that the obligation to implement the CET pursuant to Article 82 of the revised treaty does not yield any benefit to TCL and TGI “nor do they accrue any right.” Since no right or benefit accrues to the applicants, he argued that they are ineligible for special leave more so as no casual link was established between the applicants alleged loss and the failure on the part of Guyana to implement the CET.The CCJ has delivered over 20 judgments in its appellate jurisdiction.