Mark Maloney’s Rock Hard Cement Company has lost its final legal battle to have a reversal of a 50 per cent tariff on a type of cement which it imports into Barbados. Maloney, the Executive Chairman of Rock Hard Distributions, says the decision “closes the door” to any opportunity for Rock Hard Cement to re-commence operations in Trinidad.
Rock Hard, which imports “other hydraulic cement” manufactured in Turkey into Barbados, had its entire originating application for a restoration of the Common External Tariff (CET) of five per cent, dismissed by the Caribbean Court of Justice (CCJ) in a ruling on Friday.
The CCJ rejected all of the submissions by the legal team on behalf of Rock Hard Distribution Limited, Rock Hard Distributors Limited and Mootilal Ramhit and Sons Contracting Limited, who had asked the regional court to annul a 2020 decision of the Council for Trade and Economic Development (COTED), which allowed the increase in the tariff on “other hydraulic cement” imported into Trinidad and Tobago.
Two years ago, COTED, an organ of the Caribbean Community (CARICOM), granted an application by Trinidad to suspend the CET of five per cent and substitute a rate of 50 per cent on “other hydraulic cement” which was being imported by Rock Hard.
The CCJ, this country’s final court of appeal, heard Maloney’s challenge in its Original Jurisdiction, pointed out that the higher rate was applicable for all of 2021.
The claimants started the proceedings to challenge both the process by which Trinidad made the application and the decision by COTED to allow the suspension and increased rate.
In a swift response this evening to the judgment, Maloney, said this latest decision of the CCJ will result in Rock Hard Cement shutting down any future operations in Trinidad.
“The immediate economic consequences of the actions of the Government of Trinidad and Tobago in imposing a limit on imports combined with an import duty of 50 per cent continue to be felt by the consumers and the latest decision of the CCJ closes the door to any opportunity for Rock Hard Cement to re-commence operations in Trinidad,” Maloney told Barbados TODAY.
“Instead, we will focus our efforts in those countries across the Caribbean that uphold the principles of fair trade and equality and recognize the rights of all business owners and consumers,” he warned.
The prominent businessman said his company sought to pursue justice through the only avenue available to it.
“However, after five matters before the CCJ in as many years we were never under any illusion that the outcome would be any different so we accept it and move on,” the Barbadian investor stated.
According to him, the consequences of these decisions are now a part of the company’s “history” and will continue to contribute to the “suspicion and lack of confidence foreign investors have in what used to be the productive and progressive economies of the region”.
Maloney said this is especially so, now that investors “can no longer rely on the integrity, stability and impartiality of the Privy Council.”
According to the regional tribunal, the claimants alleged that the COTED decision was flawed because it was not based on accurate, relevant, sufficient, and timely information provided by Trinidad and Tobago.
Rock Hard also claimed that they were not properly consulted and that correct procedure had not been followed.
They further argued, the CCJ judges declared, that the decision was disproportionate and jeopardised 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 five-member judicial panel also cited “an important” complaint that COTED had wrongly allowed Trinidad and Tobago to impose a tariff rate for “other hydraulic cement” far beyond their World Trade Organisation (WTO) bound rate of five per cent, which is the maximum rate of duty permitted by the WTO.
Trinidad and Tobago and CARICOM did not agree and made ample written and oral submissions to this effect, said the CCJ.
They were assisted in their defence by the two interveners, the State of Belize and the local cement producer, Trinidad Cement Limited (TCL).
At the trial, several witnesses and two experts in WTO law were heard and cross-examined.
“The court 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.
However, 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,” the CCJ declared.
The court reasoned 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 in 2019.
“This, however, did not mean that CARICOM was legally bound by WTO law. 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 regional tribunal ruled.
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 stated in its judgment.
The CCJ did indicate, however, that the consultation process in Trinidad and Tobago could have been more extensive and more transparent.
“The fact that COTED was not provided with all of the information that could have aided them to make 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,” the five judges said.
With none of the submissions of the claimants having been successful, the regional tribunal dismissed the originating application in its entirety.
The court, presided over by Justices Jacob Wit, Winston Anderson, Maureen Rajnauth-Lee, Denys Barrow and Peter Jamadar, invited the parties to make submissions on costs within 14 days.
Rock Hard was represented by Ian Benjamin SC, Jagdeo Singh, Justin Phelps, Karina Singh and Nalini Jagnarine.
Deborah Peake SC, Tamara Toolsie, Brent James and Radha Sookdeo appeared for Trinidad and Tobago as First Defendant, while Dr Corlita Babb-Schaefer and O’Neil Francis were legal counsel for CARICOM, the Second Defendant. The First Intervener was represented by Eamon Courtenay SC and Samantha Matute-Tucker, the Second Intervener by John Jeremie SC and Raphael Ajodhia, and Rene Williams held a watching brief for the State of Saint Lucia. emmanueljoseph@barbadostoday.bb
