Last Friday, the Carib-bean Court of Justice (CCJ) in its Original Jurisdiction, dismiss-ed an application by Rock Hard Distribution Limited, to annul the decision of the Council for Trade and Economic Development (COTED), which allowed an increase in the tariff on “other hydraulic cement” imported into Trinidad and Tobago.
Finding there to be no justification for the annulment sought by Rock Hard Distributors (the Claimants) in the arguments advanced, the apex court threw out its application.
A release from the Court noted that in 2020, COTED—an organ of the Caribbean Community (CARICOM)—granted an application by Trinidad and Tobago to suspend the Common External Tariff (CET) of 5% and substitute a rate of 50% on other hydraulic cement, which the Claimants had been importing.
That higher rate was applicable for the entire of 2021.
The Claimants would then commence proceedings to challenge both the process by which Trinidad and Tobago made the application and the decision by COTED to allow the suspension as well as the increased rate.
The Claimants’ contention was that COTED’s decision was flawed because it was not based on “accurate, relevant, sufficient, and timely” information provided by Trinidad and Tobago, while also claiming that they had not been properly consulted and that the correct procedure had not been followed.
Rock Hard Distributors further argued that the decision was disproportionate and jeopardized the expansion of trade and economic relations with States outside of CARICOM—one of the objectives of CARICOM—and that the decision was given for an improper purpose.
The Court in its ruling noted an important complaint of the Claimants being that COTED had wrongly allowed Trinidad and Tobago to impose a tariff rate for other hydraulic cement far beyond their World Trade Organization (WTO) bound rate of 5%, which is the maximum rate of duty permitted by the WTO.
The court’s release noted from evidence presented, that Trinidad and Tobago and CARICOM did not agree and made ample written and oral submissions to this effect which was bolstered by the two interveners in the matter—the State of Belize and—Trinidad Cement Limited (TCL).
The Court said it frontally addressed the WTO point, ruling that it had jurisdiction to decide whether and to what extent WTO law is part of Community law, and whether and to what extent CARICOM, upon a proper interpretation of the Revised Treaty of Chaguaramas (RTC), would be bound by WTO law.
The Court concluded that, in relation to the setting of tariff rates, CARICOM was not bound by that law.
“A pronouncement about the WTO bound rate, and the legality of a tariff duty in violation of that WTO rate, would, therefore, go beyond the limits of the Court’s jurisdiction,” it declared.
The Court then went on to reason that, as CARICOM is part of the “WTO universe”, it is expected that COTED will have regard to the WTO bound rate of Member States when called to make decisions on the suspension or alteration of the CET as was previously indicated by the Court back in 2019.
This the Court said, however, did not mean that CARICOM was legally bound by WTO law; while noting that among other things, CARICOM, unlike its Member States, “was not a member of the WTO, WTO law is not part of customary international law, and it does not cover or restrict the powers of COTED in Caribbean Community law.”
The Court also reminded the parties that, in CET matters, COTED has a broad discretion and that the Court will only interfere with such a decision if it is manifestly wrong. As such, the Court found that, on the bases argued by the Claimants, the COTED decision could neither be successfully challenged, nor could the annulment of the decision be justified.
The Court did indicate, however, that the consultation process in Trinidad and Tobago could have been more extensive and more transparent; while noting that on the other hand, the fact that COTED was not provided with all of the information that could have aided it in making its decision was to a certain extent, due to the Claimants’ own fault, as they had not taken the opportunity to engage with the competent authority of that State while they should have done so.
In relation to the procedure followed by Trinidad and Tobago and COTED, the Court noted that there is a procedure provided for in Part C of the Revised Procedure and Forms in support of the Protocol to Amend Article 83 of the RTC.
Although Part C is not formally operative, the Court emphasized an earlier decision that a fair procedure is required.
The Court would then go on to note that since the members of COTED themselves had agreed to the procedure contained in Part C, the Court ruled that “this Part should be followed in its essence or spirit, if not to the letter.”
The CCJ found, though, that the prescribed procedure was basically followed in this case, although there were some flaws. It noted that those flaws were not sufficient to vitiate the decision of COTED.
The Court said it rejected the submission that the objective of expansion of trade with States outside of CARICOM had been prejudiced by the COTED decision, noting that this was just one of CARICOM’s objectives.
The Court pointed out in its ruling that there were others that may conflict with that objective, such as the fundamental objective of CARICOM to create a protected market for producers and manufacturers in CARICOM; while stating that the provisions in Article 78(2)(c), (2)(d), (3)(b) and (4) of the RTC, for example, make clear that the expansion of trade with third countries specifically focusses on exports and that, where “imports” are mentioned, the reference is limited to the importation of goods or products of CARICOM origin.
“It does not cover the importation of products from States outside of CARICOM,” the Court said.
With none of the submissions of the Claimants having been successful, the Court dismissed the originating application in its entirety. The parties have been invited to make submissions on costs within fourteen days.
Presiding over the matter were Justices Jacob Wit, Winston Anderson, Maureen Rajnauth-Lee, Denys Barrow and Peter Jamadar.
The Claimants were listed in the action as Rock Hard Distribution Limited and Rock Hard Distributors Limited Mootilal Ramhit and Sons Contracting Limited.
Trinidad and Tobago was listed as the first Defendant, while the Caribbean Community was listed as the second Defendant.
Meanwhile, the State of Belize was listed as the first intervener, and Trinidad Cement Limited as the second intervener.
