THE decision of the Caribbean Court of Justice (CCJ) to institute a five-year period of limitation within which companies or persons can seek redress for the settlement of cases involving the unlawful collection of taxes, which contradicts the Revised Treaty of Chaguaramas is a “watershed ruling,” according to the Attorney General and Legal Affairs Minister, Basil Williams.

The Government of Guyana’s legal team included Williams, Dr. Claude Denbow S.C, Ms Donna Denbow, Attorney-at-Law and Ms Judy Stuart-Adonis from the Attorney General’s Chambers. Hans Lim-A-Po of Suriname represented S.M. Jaleel.

In handing down its judgment on Tuesday in the case – SM Jaleel and Guyana Beverages Inc. v the State of Guyana – the CCJ ordered Guyana to pay a collective sum of Environmental Tax for the period March 7, 2011 to August 2015 together with a four percent interest per annum. Ahead of the judgment, the companies had argued that Guyana had breached the principles of trade liberalisation and free movement of goods envisioned by the Revised Treaty of Chaguaramas (RTC) –the treaty which established the Caribbean Community (CARICOM) and the CARICOM Single Market and Economy (CSME). As such, they were claiming a refund of the environmental taxes imposed on the companies during the period January 1, 2006, to the date of repeal of the Act in August, 2015.

But in its ruling, the CCJ barred Claimants by way of “laches” from claiming beyond a period of five years, based on a submission made by Guyana. “The Court finds that a period of five years is neither too long nor unduly short for a claimant to commence proceedings. The court considers that this time limit will protect states from being vexed by claims relating to long-past incidents about which their records may no longer be in existence and as to which their witnesses may well have no accurate recollection,” the CCJ explained.

It noted too that the specified period will encourage claimants to file their suits in a timely fashion. “This 5-year period permits adequate access to justice and is consistent with both international and regional standards. It will run from the time that the claimant knew or at the very least reasonably should have known that the Defendant State was in breach of the treaty,” the CJJ further explained.

Watershed
When contacted for a reaction on Wednesday, the Attorney General said: “This is a watershed ruling for Guyana and the A Partnership for National Unity + Alliance for Change (APNU+AFC) Government, given the five year limit the court has imposed on claimants in these matters.”

He added: “Guyana could have been condemned to repay large sums of monies, which were unlawfully collected by the PPP Government. What the ruling has done is that people can’t sit on their rights and wait years after knowing of a breach before make a claim now that the court has imposed the limits.”

It was noted that this is the first time that “laches” was used with regards to Guyana. For the CCJ, it was a win-win situation for both SM Jaleel and its subsidiary and the State of Guyana. “The Claimants (SM Jaleel and its subsidiary Guyana Beverages Inc) have substantially succeeded on their claims. As the Defendant (the State of Guyana) has succeeded on a part of their laches defence, the Court awards the Claimants 70 per cent of their costs pursuant to its powers…,” the CCJ stated.

However, the CCJ, as in the case – Rudisa Beverages and Juices N.V and the Caribbean International Distributors Inc. v The State of Guyana, maintained that Guyana, under the PPP administration had breached Article 87(1) of the RTC by imposing an environmental tax on imported non-returnable beverage containers, which qualify for Community treatment. As such, Guyana was mandated to pay the companies the aggregate sum paid by the Claimants by way of environmental tax from March 7, 2011 to August 7, 2015. Additionally, the country was required to pay interest on the sums payable by the judgment at the rate of 4 per cent per annum from the date of judgment. It is also mandated to file with the Court on or before November 9, 2017 a report on its compliance with the orders given. “All of this happened because of the ineptitude of the PPP Government,” Williams said.

Rudisa Beverages had taken the PPP Government to court over the “discriminatory” environmental tax a few years ago. The company had argued that there was an imposition of $10 on every disposable container imported into Guyana. They eventually won the case, by arguing that a similar tax was not imposed on local distributors such as Banks DIH and Demerara Distillers limited.

The Caribbean Court of Justice (CCJ) subsequently granted the PPP Government of Guyana time to repay US$6M – which the two parties agreed to – by January 31, 2016. SM Jaleel & Company Limited, also known as SMJ, is the largest manufacturer of non-alcoholic beverages in the English-speaking Caribbean. Since the inception in 1924, their portfolio of beverages has been distributed to over 60 countries worldwide. SMJ’s products include a wide array of soft drinks, fruit juices, purified and flavoured water, energy drinks, and other fruit-flavoured beverages.

The company’s headquarters is based in Trinidad and Tobago with subsidiary offices in Jamaica, Barbados, Suriname, Guyana, St. Lucia, South Africa and some parts of Asia.