Hummingbird Rice Mills Ltd Claimant v Suriname The Caribbean Community Defendants

CourtCaribbean Court of Justice
Docket NumberCCJ Application No OA 1 of 2011
Judgment Date23 Feb 2012
JurisdictionCaribbean States
Neutral Citation[2012] CCJ 1 OJ

[2012] CCJ 1 (OJ)

IN THE CARIBBEAN COURT OF JUSTICE

CCJ Application No OA 1 of 2011

Between
Hummingbird Rice Mills Ltd
Claimant
and
Suriname
The Caribbean Community
Defendants
THE COURT

Composed of R Nelson, A Saunders, J Wit, D Hayton and W Anderson, Judges

Having regard to the originating application filed at the Court on June 14, 2011 as amended, together with the annexures thereto, the Defence filed on behalf of the First Defendant on July 29, 2011, the Defence filed on behalf of the Second Defendant on July 29, 2011, the Reply filed on behalf of the Claimant to the Defences of the First and Second Defendants on October 31, 2011, the written submissions filed on behalf of the Claimant on November 18, 2011, the written submissions filed on behalf of the First Defendant on November 18, 2011, the written submissions filed on behalf of the Second Defendant on November 18, 2011 and to the public hearing held on December 14 and 15, 2011 And after considering the oral submissions made on behalf of:

  • The Claimant, by Mr Elvis Connor, Attorney-at-Law appearing in association with Ms Linda Greene, Attorney-at-law

  • The First Defendant, by Mr Hans Lim A Po, Attorney-at-Law

  • The Second Defendant, by Ms Safiya Ali, Ms Gladys Young and Dr Chantal Ononaiwu Attorneys-at-Law

Ms. Christlyn Moore and Mr. Christopher Sieuchand, Attorneys-at-law, being present as representatives of the State of Trinidad and Tobago, with the leave of the Court

ISSUES on the 23rd day of February, 2012 the following:

Introduction
1

These proceedings were commenced by an application filed at the Court Registry on 24th February 2011, by which Hummingbird Rice Mills Ltd. (‘the Claimant’ or ‘HRM’) sought special leave pursuant to Article 222 of the Revised Treaty of Chaguaramas (‘the Revised Treaty’ or ‘RTC’) to initiate suit against the State of Suriname (‘Suriname’ or ‘First Defendant’) and the Caribbean Community (‘The Community’ or ‘CARICOM’ or ‘Second Defendant’). A copy of the proposed originating application was annexed to the application for special leave. On 3rd June 2011, following a hearing convened for that purpose and the reading of written submissions tendered on behalf of the parties, this Court granted special leave and ordered that the costs of the application for leave abide the outcome of the proceedings.

2

Pursuant to the Original Jurisdiction Rules of this Court the Claimant filed its Originating Application with Annexures on 14th June 2011, which was in the same form as the proposed originating application but with some amendments approved by the Court.1 Suriname and The Community filed their respective written defences on 29th July 2011. A case management conference was held on 10th October 2011 at which directions were given regarding the preparation and presentation of the case. The Claimant subsequently filed a Reply dated 31st October 2011 and the parties thereafter filed written submissions.

3

The Amended Originating Application was heard on 14th and 15th December 2011, at the Seat of the Court. Oral testimony was received from three witnesses: Mr. Jaiprakash Benie, the CEO and Chairman of the Claimant; Ms. Heather Camille Job, an Export/Logistic Manager of the Claimant; and Mr. Rajin Ramkissoon, a Chartered Accountant who was the External Accountant for the

Claimant. The testimony, which was based on previously submitted written witness statements, was tested in cross-examination.
The factual background
4

The Claimant is a limited liability company which was incorporated under the laws of Trinidad and Tobago on 24th March 1995 and which engages in the sale and distribution of flour. By virtue of section 5 of the Companies Act 1995 of Trinidad and Tobago,2 HRM and other companies in the group controlled by the CEO and Chairman of HRM are considered to be ‘affiliated corporations’. In 2007 the Claimant changed its name to Caribbean Flour Mills Limited and traded as such until September 2010 when it reverted to being HRM. An affiliated company, Transit Shipping Agency Limited, incorporated in 2009 but which had carried on no business activity, then changed its name to Caribbean Flour Mills Limited. The main operation of the group of affiliates is the production and sale of rice and flour. In particular, Republic Grains Investments Limited engages in the production of flour but distributes it through HRM which sold the flour in its own name and then in its new name of Caribbean Flour Mills Limited. Indeed, after changing its name in September 2010 back to HRM, sales of flour were made to persons under invoices in the name of Caribbean Flour Mills Limited, the new name of Transit Shipping Agency Limited. It is unclear whether Caribbean Flour Mills Limited was acting for itself as principal or as agent for HRM. It became apparent from the documentation and the evidence of HRM's three witnesses that in paying bills and in receipts from invoices insufficient attention was paid to the separateness of the individual companies' debts and entitlements.

5

By reason of its acceptance of the original Treaty of Chaguaramas 1973, Suriname became a Member of the Caribbean Community in July 1995 and the Common Market in January 1996. On 10th April 1997, the Government of Suriname issued a Ministerial Order suspending for an indefinite time the levying

of import duties on certain items including flour. As a consequence the Common External Tariff (the ‘CET’) payable on flour was never applied.
6

In or around 2005, a major plant expansion and modernization was commissioned and constructed in Trinidad by Republic Grains Investments Limited in affiliation with HRM to enhance and increase production capabilities. The upgrade included relocation of the plant from the Fernandes Industrial Estate to the Point Lisas Industrial Estate; construction and commission of a 240MT/24 hours flour mill; increase in exports from 20 containers to 125 containers monthly in 45kg bags; acquisition of several ERF trucks, trailers and establishing of the company's own container transport service; purchase of vessels and establishment of a shipping line (namely, Trans-Caribbean Line); commissioning of a new four (4) storey office building; construction and commissioning of a new storage bond. The Claimant estimated the cost of the upgrade at approximately $48,229,405.

7

The suspension of the duties on flour imposed by the Surinamese Ministerial Decree of 1997 was operative throughout and subsequent to the expansion exercise and the Claimant alleged that it was disadvantaged in its efforts to export flour to Suriname by reason of the non-imposition thereon of the CET from 1 January 2006 when it ought to have been imposed. Notably, the Claimant alleged that its attempts to supply flour to Fernandes Bakery were frustrated by that bakery's importation of flour from The Netherlands without payment of the CET. Fernandes Bakery is one of the largest makers of bread in Suriname.

8

The Claimant and its affiliated corporations caused the Ministry of Trade and Industry of Trinidad and Tobago to complain to the Secretary-General of the Community about the non-application of the CET by Suriname. The complaint is chronicled in written correspondence beginning on 23rd February 2006. The Secretary-General initiated an investigation into the grievance; this included a letter dated 20th March 2006, seeking a response from Suriname. The matter was reported to the Twenty-First Meeting of the Council for Trade and Economic Development (‘COTED’) held 12–13 May 2006, at St Anns, Trinidad and Tobago, with the observation that no response had been received from Suriname. The Meeting noted, however, that Suriname was reviewing the matter and would report to the CARICOM Secretariat. Almost nine months later, by letter dated 7th November 2006, the Ministry of Trade and Industry of Suriname admitted that flour was being imported from the Netherlands without application of the CET. The Ministry indicated, however, that the flour was classified under the tariff heading 1101.00.10 as wheat or meslin flour of durum wheat which attracted the prescribed rate of 0–5% under the Harmonized Commodity Description & Coding System. The Twenty-Second Meeting of COTED held 16–17 November 2006, in Georgetown, Guyana, noted an undertaking by Suriname to investigate the issue of the classification of the imported flour. By letter dated 29th December 2006 from the Ministry of Trade and Industry of Suriname to the Secretary-General, Suriname acknowledged that the imported flour was classified under the wrong tariff heading; the correct classification was tariff heading 1101.00.90 for wheat or meslin flour other than durum wheat with a prescribed tariff of 25%. The letter, however, raised concerns related to the quality and price of regional flour and sought a suspension of the CET for a period of two years. In its written response of 24th January 2007, the Secretary-General indicated that price and cost of living concerns did not form actionable bases for the Secretary-General to authorize suspensions and suggested that requests for suspension based upon quality concerns could be brought to the attention of Member States of the Community.

9

At the Twenty-Fifth Meeting of COTED held on 25th January 2008, in Providence, Guyana, Suriname admitted that no duty was being applied to flour from extra-regional sources and requested that flour be placed on the list of items for removal or suspension of the CET. There is no record of COTED acceding to this request; rather, the Council accepted an undertaking from Suriname to provide the Secretariat with an update within fourteen days, that is, by 8th February 2008. This timeline was not met and over four months later, on 17th June 2008, the Secretariat wrote to Suriname, reminding the Member State of its undertaking. The Twenty-Sixth Meeting of COTED held 24–25 November 2008, in Georgetown, Guyana, received representations...

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