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Comment on RUDISA BEVERAGES & JUICES N.V. CARIBBEAN
INTERNATIONAL DISTRIBUTORS INC. V GUYANA [2014] CCJ 1 (OJ).
This cas...
2
amended by the Guyana Fiscal Enactments (Amendment) Act No. 3/95, the tax is imposed on all
imported non-returnable beve...
3
imposed by Belgium for imported diamonds for the provision of security benefits for workers in
the Belgian diamond indus...
4
Relief claimed:
The test for a claim for damages was laid down by the Court in its early decision
Trinidad Cement Limite...
5
This is the main similarity based on the facts of these two cases. In the Hummingbird
case the claimant was a limited li...
6
Comateb41
the ECJ said that if the burden of the charge was passed on only in part, then the
national authorities only h...
7
It places an obligation on all parties to whom the judgment of the Court applies to comply with
the judgment of the Cour...
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Comment on Rudisa Beverages & Juices n.v. Caribbean International Distributors Inc. v. Guyana [2014] CCJ 1 (OJ).

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This essay seeks to analyse the judgment delivered by the Caribbean Court of Justice in the recent case Rudisa Beverages & Juices v Guyana [2014] CCJ 1 (OJ).

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Comment on Rudisa Beverages & Juices n.v. Caribbean International Distributors Inc. v. Guyana [2014] CCJ 1 (OJ).

  1. 1. 1 Comment on RUDISA BEVERAGES & JUICES N.V. CARIBBEAN INTERNATIONAL DISTRIBUTORS INC. V GUYANA [2014] CCJ 1 (OJ). This case concerned an action by the Claimants, Rudisa Beverages and Juices N.V.(Rudisa Beverages) and Caribbean International Distributors Inc. (CIDI), alleging that an environmental tax imposed by the Guyanese government pursuant to s. 7A of the Customs Act of Guyana on all imported non-returnable beverage containers was in breach of Article 87 and 90 of the Revised Treaty of Chaguaramas (RTC)1 . They alleged that they suffered substantial damages in the excess of USD $6 million and inter alia, sought reimbursement of the payment of the environmental tax up to the date of judgment2 . The Caribbean Court of Justice (CCJ) in making its decision held that the government of Guyana had to repay the Claimants the sum of the environmental tax amounting to the USD $6,047,244.77 paid up to the date of judgment3 . The Court however was very articulate when it said that this was not a case concerning damages and the test for damages as was enunciated in its earlier case law4 but rather a case concerning reimbursement5 . This paper seeks to highlight the decision of the Court in this respect in granting of the order to repay the sum of the environmental tax concerned and the earlier case law6 of the Court in its original jurisdiction regarding the granting an award of damages and against the backdrop of the most recent decision of the Court, Shanique Myrie v The State of Barbados7 . Mention will also be made on the parallel European Union law perspective with respect to the free movement of goods provided for in Article 28 Treaty on the Functioning of the European Union (TFEU) but firstly, a brief discussion on the judgment is needed. The facts: Rudisa Beverages, based in Suriname exported the beverages in non-returnable beverage containers to its subsidiary CIDI in Guyana for sale in the Guyanese market. The claim concerned an application by the Claimants alleging that the environmental tax placed on all non- returnable beverage containers, which was imposed only on imports, was in breach of art. 87 and 90 of the RTC. According to the environmental tax, pursuant to s.7A of the Customs Act as 1 Rudisa Beverages & Juices N.V. Caribbean International Distributors Inc. v. Guyana [2014] CCJ 1 (OJ), at paragraph [11]. 2 Rudisa Beverages & Juices at, paragraph [11]- relief was also sought an order mandating the revocation and removal of offending legislation or removal of its discriminatory elements and an order restraining the imposition and collection of the environmental levy. 3 Rudisa Beverages & Juices, at paragraph [38]. 4 Trinidad Cement Limited and TCL Guyana Incorporated v The State of the Co-operative Republic of Guyana [2009] CCJ 5 (OJ), at paragraph [27]. 5 Rudisa Beverages & Juices, at paragraph [34]. 6 Trinidad Cement Limited and TCL Guyana Incorporated v The State of the Co-operative Republic of Guyana [2009] CCJ 5 (OJ); Trinidad Cement Limited v CARICOM [2009] CCJ 4 (OJ); Hummingbird Rice Mills v Suriname and CARICOM [2012] CCJ 1 (OJ). 7 Shanique Myrie v The State of Barbados [2013] CCJ 3 (OJ).
  2. 2. 2 amended by the Guyana Fiscal Enactments (Amendment) Act No. 3/95, the tax is imposed on all imported non-returnable beverage containers and this results in an increase by GUY $ 10 on each unit of which local manufacturers were not subject to pay8 . Several attempts were made with COTED to get the matter resolved but it was never resolved9 . The Government of Guyana attempted to resolve the issue in 2013 however the National Assembly rejected this proposal and CIDI paid in excess of USD $6 million10 . The main reason given by Guyana to justify the imposition of this tax was the protection of the environment which is a fundamental right by virtue of the 2001 amendment to the Constitution which brought into force art. 149(J)11 . The Court then commented on the purpose of Chapter Five of the RTC under which the alleged claims fell and said that s.7A of the Customs Act is inconsistent with the principles of trade liberalization as depicted by Chapter Five of the RTC12 . Liability for breach of the RTC: The Attorney General of Guyana sought to argue that the breach of Guyana was excusable since the government did make efforts to resolve the inconsistency in the law but was rejected by the National Assembly. The Court quickly made waste of this argument citing the principle of pacta sunt servanda which is underlined in art. 9 RTC as well as citing art. 27 Vienna Convention on the Law of Treaties, 1969 which says that a State cannot rely on the provisions of internal law as justification for its failure to comply with treaty obligations13 . The Court noted that for the operation of the CSME uniform application of trade policy contained in Chapter Five is necessary and that a central feature of the CSME is the free movement of goods and elimination of trade barriers for goods of Community origin14 . This can be compared to the parallel position in the EU where, according to art. 28(1) TFEU, there is a prohibition of customs duties on import and exports and all charges having equivalent effect as it is a pre-requisite for the free movement of goods within the EU. Similarly, in the RTC the effect of art. 87(1) RTC prohibits the imposition of any import duties on any Community origin good15 . The purpose of the environmental tax did not excuse the discriminatory impact of the tax and the Court said it was contrary to art. 87(1) RTC as it satisfied the definition of an ‘import duty’ pursuant to art. 1 RTC. In addition to this it was also discriminatory in effect since it did not apply to locally produced non-returnable containers16 . Citing ECJ jurisprudence the Court made reference to Joined Cases 2 and 3/69 Sociaal Fonds17 where the ECJ held that a levy 8 Rudisa Beveages & Juices at paragraph [7]. 9 Rudisa Beverages & Juices at paragraph [8]. 10 Rudisa Beverages & Juices at paragraph [10]. 11 Rudisa Beverages & Juices at paragraph [14]. 12 Rudisa Beverages & Juices at paragraph [16]. 13 Rudisa Beverages & Juices at paragraph [17]-[18]. 14 Rudisa Beverages & Juices at paragraph [20]. 15 Article 84 RTC provides the Community Rules of Origin. 16 Rudisa Beverages & Juices at paragraph [22]. 17 Joined Cases 2 and 3/69 Sociaal Fonds voor de Diamantarbeiders v S.A. Ch. Brachfeld & Sons and Chougol Diamond Co. [1969] ECR 211.
  3. 3. 3 imposed by Belgium for imported diamonds for the provision of security benefits for workers in the Belgian diamond industry was contrary to art. 30 TFEU which prohibits imposition of customs duties and charges of equivalent effect. Another case worthy of mention is Case 7/68 Commission v Italy 18 where the ECJ held that a charge made to protect the historical and artistic heritage of a Member State was unlawful. Based on the reasoning of the ECJ in Sociaal Fonds, the Court said that irrespective of the purpose of the imposition of the environmental tax, its imposition was a breach of the RTC since it applied to Community origin goods. Perhaps at this point it is worthy to mention the position of the ECJ when it comes to customs duties and charges of equivalent effect. The ECJ in Case 24/68 Commission v Italy19 defined a charge of equivalent effect as: “any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier and which is not a custom duty in the strict sense…, even if it is not imposed for the benefit of the State, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product.” [emphasis added]. From the definition provided by the ECJ in the mentioned case above, it can be seen that the absolute prohibition of charges of equivalent effect applies even where the money is not used for any protectionist purpose20 . Returning back to the present case in discussion, nowhere in the judgment of the Court did it refer to the environmental tax being of any protectionist nature. From the above analysis, it would appear that the Court in discussing its issues based on Chapter Five of the RTC is following the position of the ECJ in matters dealing with the free movement of goods. Orders and Relief sought: The Claimants urged the Court to make an order compelling Guyana to ‘revoke and remove’ s.7A of the Customs Act from its domestic laws or to take legislative action to address its discriminatory effect21 . The Court referred to its earlier case law in Trinidad Cement Limited v CARICOM22 where it indicated its jurisdiction to grant relief for breaches of the RTC and it also extended to coercive orders. An order was then made to compel Guyana to adopt measures to ensure that goods designated for Community treatment are not subject to any tax imposition contrary to the RTC23 . 18 Case 7/68 Commission v Italy [1968] ECR 617. 19 Case 24/68 Commission v Italy [1969] ECR 193, paragraph [9]. 20 Barnard, C., The Substantive Law of the EU. The Four Freedoms, 3rd edn, 2010, Oxford: OUP, p. 46. 21 Rudisa Beverages & Juices at paragraph [11]. 22 Trinidad Cement Limited v CARICOM [2009] CCJ 4 (OJ) at paragraph [42]-[43]. 23 Rudisa Beverages & Juices at paragraph [27].
  4. 4. 4 Relief claimed: The test for a claim for damages was laid down by the Court in its early decision Trinidad Cement Limited and TCL Guyana Incorporated v the State of the Co-operative Republic of Guyana 24 (Trinidad Cement v Guyana) which emerged from the ECJ in Joined Cases C-6/90 and 9/90 Francovich v Italy25 and further refined in Brasserie du Pecheur26 . According to claim for damages, the Claimant had to satisfy three requirements: 1. The party needs to show that there was a conferred benefit on that person for the allegedly breached provision. 2. The breach had to be serious with substantial loss. 3. A causal link between the breach and the loss or damage to the person had to be shown. At the outset the Court said that this threshold for damages was a high one27 . In the present case the Court refused to acknowledge that the present claim was one for damages. Instead the Court said that the test for damages as enunciated by the Court in Trinidad Cement v Guyana was inapplicable since re-imbursement for the monies paid for the environmental tax is claimed in the present instance28 . The State of Guyana could not be able to benefit from its own wrongful conduct and the Claimants were entitled to re-imbursement of the sums paid. At this point, the case Hummingbird Rice Mills v Suriname and CARICOM29 can be compared to the instant case. In that case, the claimants, Hummingbird Rice Mills (HRM), alleged it suffered financial loss by reason of failure of Suriname to implement the CET during the period 2006-2010. HRM claimed damages in the amount of approximately USD $3 million with interest30 . Among the various losses, HRM claimed damages against Suriname for the loss of profits over a 4 ½ year period. For the first time the court in the Hummingbird case said that the most difficult hurdle for satisfying the test for damages was for the claimant, HRM, to prove that it suffered substantial loss as a result of the breach by Suriname31 . HRM failed this last hurdle, inter alia, because of its corporate nature since it had to clearly distinguish the losses by HRM as separate to those of Republic Grains Ltd with which it was affiliated resulting in no award for damages being granted. 24 Trinidad Cement Limited and TCL Guyana Incorporated v the State of the Co-operative Republic of Guyana [2009] CCJ 5 (OJ) at paragraph [27]. 25 Joined Cases C-6/90 and 9/90 Francovich v Italy [1991] ECR 1-5357. 26 Joined Cases C-46/93 and C-48/93 Brasserie du Pecheur SA v Germant and R v Secretary of State for Transport ex parte Factorame Ltd [1996] ECR I-1029. 27 Trinidad Cement Limited and TCL Guyana Incorporated v the State of the Co-operative Republic of Guyana [2009] CCJ 5 (OJ) at paragraph [28]. 28 Rudisa Beverages & Juices at paragraph [29]. 29 Hummingbird Rice Mills v Suriname and CARICOM [2012] CCJ 1 (OJ). 30 Hummingbird Rice Mills v Suriname and CARICOM [2011] CCJ 1 (OJ), at paragraph [11]. 31 Hummingbird Rice Mills v Suriname and CARICOM [2012] CCJ 1 (OJ), at paragraph [59].
  5. 5. 5 This is the main similarity based on the facts of these two cases. In the Hummingbird case the claimant was a limited liability company which was considered an ‘affiliated company’ by virtue of s. 5 of the Companies Act, 1995 of Trinidad and Tobago32 . Similarly in the present case, the Claimants are part of a group of corporate entities knows as “Rusida Group of Companies” and CIDI is a subsidiary of the Rusida Group of Companies33 . It is here where the concept of damages for the claimant gets somewhat bizarre. In the Hummingbird case, HRM claimed, inter alia, an award of damages in the amount of USD $3,003,00034 . In the present case the claimants seek, inter alia, damages for loss caused by the payment of the environmental tax up to the date of judgment35 . What may be the reasoning behind the decision of the Court may be the fact that in Hummingbird, the claimants claimed damages for hypothetical36 loss of profit over the 4 ½ year period whereas in the present case the claimants actually paid the environmental tax thereby incurring losses on CIDI. It seems therefore that the definitive line between a claim for an award of damages is very fine compared to other orders of relief. Perhaps if the claimants in the Hummingbird case did have actual cogent evidence stating losses incurred by them amounted to a figure then the Court may have ruled differently since the reason the claimants in that case did not pass the test for damages was because they could not show the causal link between the breach and the loss of damage to the claimant37 and more so, the corporate nature of the claimants resulted in HRM being unable to distinctly show which losses were separate from that of its parent company. From this it can be seen how this case differed from the Hummingbird case and the difference the provision of cogent evidence can make. The Attorney General of Guyana sought to argue that the Claimants could not be entitled to re-imbursement since they passed on the cost to consumers by re-adjusting their prices to account for the increased unit price38 . Lack of evidence by the Attorney General resulted in this allegation being struck out by the Court but if evidence was shown it would have certainly impacted on the Court’s decision to grant the Claimants re-imbursement of the sums paid. The ECJ has set out its own position on the repayment of unlawful charges. In Case 199/82 San Giorgio39 the ECJ held that a restitutionary claim was available to a trader who had paid a customs duty or a charge of equivalent effect which is contrary to EU law. However, the ECJ went on to say that no restitutionary claim would exist where the trader passed on that cost to consumers since it would mean such trader would be unjustly enriched40 . In Case C-192/95 32 Hummingbird Rice Mills v Suriname and CARICOM [2012] CCJ 1 (OJ), at paragraph [4]. 33 Rusida Beverages & Juices at paragraph [6]. 34 Hummingbird Rice Mills v Suriname and CARICOM [2012] CCJ 1 (OJ), at paragraph [15]. 35 Rudisa Beverages & Juices at paragraph [11]. 36 Hummingbird Rice Mills v Suriname and CARICOM [2012] CCJ 1 (OJ), at paragraph [53]. 37 Hummingbird Rice Mills v Suriname and CARICOM [2012] CCJ 1 (OJ), paragraph [59]. 38 Rudisa Beverages & Juices at paragraph [30]. 39 Case 199/82 Amministrazione delle Finanze dello Stato v SpA San Giorgio [1983] ECR 3595, at paragraph [12]. 40 [1983] ECR 3595, at paragraph [13].
  6. 6. 6 Comateb41 the ECJ said that if the burden of the charge was passed on only in part, then the national authorities only had to reimburse the trader for the amount not passed on. For this reason, the Court in this case cited these cases and it appears that lack of evidence by the Attorney General for the allegations proved in favour of the Claimants but in any event this argument is only moot since based on the evidence by the Claimants, the Court was satisfied that the tax was not transferred on to the consumers42 . How do we reconcile this with the ruling in Shanique Myrie v Barbados43 ? As mentioned earlier, the Court in the present case said that it was not awarding any damages but rather ordering reimbursement for the losses occasioned as a result of the unlawful tax paid by the Claimants44 . This is a bold statement by the Court yet one which is not surprising. Notwithstanding the Myrie decision where for the first time an award of damages were granted to the claimant, the most the Court ever did financially for claimants in its original jurisdiction was order the defendant to pay some portion of their costs45 . In the present case the Court also ordered Guyana to pay, inter alia, the cost of the present proceedings, in addition to the re- imbursement of the money paid by the Claimants by way of the environmental tax46 . In Myrie, the Court, after it awarded the damages (both pecuniary and non-pecuniary) to the claimant, made the statement that the damages were not awarded for the breach of the claimant’s fundamental or human rights but rather their right to travel within the Community “without hassle or the imposition of impediments”47 . Comparing this statement to the one mentioned by the Court in the present case saying it was not awarding any damages, it appears that the Court has placed itself within the strict limits of the test for damages established in Trinidad Cement v Guyana which gives it little wiggle room for awarding damages yet it still embraces the role of the Court as guardian of RTC and to ensure that Member States comply with their treaty obligations. As such it is prepared to vindicate the claimants of any breaches of the RTC which they allege and is proved48 . This is strengthened by art. 215 RTC which is the appropriate vehicle to ensure the protection of the Community rights of CARICOM nationals49 . 41 Joined Cases C-192- 218/95 Societe Comateb v Directeur de Douanes et Droits Indirects [1997] ECR 1-165, at paragraph [28]. 42 Rudisa Beverages & Juices at paragraph [32]. 43 Shanique Myrie v The State of Barbados [2013] CCJ 3 (OJ). 44 Rudisa Beverages & Juices at paragraph [34]. 45 Trinidad Cement Limited v Caribbean Community [2009] CCJ 4 (OJ), [82] ( the Court ordered payment of half the costs); Trinidad Cement Limited and TCL Guyana Inc. v Guyana [2009] CCJ 5 (OJ), [46] (the Court ordered payment of two-thirds costs); Trinidad Cement Ltd and TCL Guyana Inc. v Guyana [2009] CCJ 6 (OJ) [15] (payment for one half of the costs was ordered by the Court); Hummingbird Rice Mills v Suriname and CARICOM [2012] CCJ 2 (OJ), [8] (Suriname was ordered to pay 50% of the costs incurred by the Claimant). 46 Rudisa Beverages & Juices at paragraph [39]. 47 Shanique Myrie v Barbados [2013] CCJ 3 (OJ), at paragraph [100]. 48 Such measures other than award of damages include interim measures, coercive remedies and award of costs. The Court in Trinidad Cement Limited v CARICOM [2009] CCJ 4 (OJ), [42] said that it has the power to grant interim measures and [43] the Court stated that it also has powers to grant coercive remedies. 49 Rudisa Beverages & Juices at paragraph [38].
  7. 7. 7 It places an obligation on all parties to whom the judgment of the Court applies to comply with the judgment of the Court. Conclusion: With the passing of this judgment the Court appears to be opening its doors and extending its leniency further to potential claimants before the Court in its original jurisdiction. More so, with respect to those private entities, if the chance of an award of damages is very slim as in the Trinidad Cement v Guyana and Hummingbird case, it may discourage such claimants from seeking relief before the CCJ especially where the only relief granted is a coercive order against the State. Even though it may be argued that private entities would effectively benefit from these coercive orders made by the Court, since these entities are profit driven50 they would be incurring severe losses in the end when their claims for damages are unsuccessful. The Court in the Trinidad Cement v Guyana51 case raised this point when it said private entities played a major role in fulfilling the goals and objectives of the RTC. However with the ruling of the Court in the present case it does appear to give hope to those private entities who allege breaches of their rights under the RTC by Member States as explained above, the concept of re-imbursement was used as a viable option to remedy breaches of the Member State even though the case may not one for an award of damages. How much further the Court will expand on its already dynamic views with regard to remedies remains to be seen but from the above arguments, the future for potential claimants including private entities before the Court appears to be brighter than those in its earlier judgments. Liam Labban University of the West Indies, Cave Hill Campus, Barbados 50 Berry, D, Caribbean Integration Law, Oxford, OUP, 2014, p. 433. 51 See Trinidad Cement Ltd. and TCL Guyana Inc. v Guyana [2009] CCJ 1, paragraph [13].

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