CCJ adjourns cement tariff proceedings against Guyana
The Caribbean Court of Justice (CCJ) yesterday adjourned the application of two cement companies for special leave to sue Guyana over the Common External Tariff (CET) so that Caricom states could be afforded an opportunity to make submissions on two key matters before the court.
The CCJ held that the resolution of the issues brought before it by Trinidad Cement Limited (TCL) and TCL Guyana Incorporated (TGI) goes to the core of the court’s jurisdiction and therefore it wanted to provide the opening for further submissions before making a determination. The case has been adjourned to November 10.
In its interim order yesterday, the CCJ noted that the proceedings are historic as it was the first time that the court was being engaged in its original jurisdiction. It noted therefore that there was no precedent to follow in the interpretation and application of the revised Treaty of Chaguaramas underpinning the community and including the Caricom Single Market and Economy.
The CCJ ordered that the court’s registrar issue a notice to the contracting parties other than Guyana and to Caricom, within seven days, giving them the opportunity, if they so wish to make written submissions on two matters: whether under Article 222, 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 is also seeking 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 written submissions by other contracting parties to the agreement establishing the CCJ must be filed on or before October 13, 2008. They may request an opportunity to make oral submissions on the same legal issues. The court will hear the submissions, if any on November 10, 2008.
The proceedings were the first matter in which the CCJ has been called upon to exercise its original jurisdiction since it first began its hearings in 2005.
The decision to adjourn was handed down yesterday at the CCJ’s headquarters in Port of Spain.
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 by 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.
Breach
According to the CCJ’s interim order yesterday, in their application, 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 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 from January 2007 and continuing even though the suspension of the CET commenced before January 2007, they also allege 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.
Shortage
On the other hand, Guyana, which was represented by the Attorney General 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.
The attorney general 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 “States 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 have 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.
Responding to the Attorney General’s submission challenging the application for special leave on the ground that the companies were not nationals within the meaning of the revised treaty, the CCJ said that it was clear that the applicants for special leave were required to bring themselves within the meaning of “persons” as set out in the chapeau of Article 222 of the revised treaty.
Specifically, the CCJ said that it must be determined whether for the purposes of Article 222 it was sufficient for a company to be incorporated or registered under the domestic legislation of a contracting party and secondly it must be determined whether Article 222 accords one who is held to be a person, natural or juridical, of a contracting party (a state) the right to sue that contracting party.
President of the CCJ, Justice Michael De La Bastide presided over the court with others judges being Justices Rolston Nelson, Duke Poillard, Adrian Saunders, Desiree Bernard, Jacob Wit and David Hayton.