CCJ rules in SM Jaleel’s favour

May 9, 2017 Source

–in landmark environment tax violation suit against Guyana

THE Caribbean Court of Justice (CCJ) has ruled in favour of Trinidad-based beverage company SM Jaleel and its subsidiary, ordering the Government of Guyana to repay millions of dollars to the companies for environmental taxes paid in violation of the Revised Treaty of Chaguaramas.

The ruling was handed down on Tuesday by CCJ President Sir Dennis Byron, via a video conference, Attorney-General and Legal Affairs Minister, Basil Williams has confirmed.
SM Jaleel and its locally based subsidiary, Guyana Beverages Inc., in April last year moved to the court seeking redress. They had argued that Guyana had breached the principles of trade liberalisation and free movement of goods envisioned by the Revised Treaty of Chaguaramas, the treaty which established the Caribbean Community (CARICOM) and the CARICOM Single Market and Economy (CSME).

The applicants 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.
However, when Sir Dennis handed down the judgement, Guyana was ordered to pay a collective sum of Environmental Tax for the period March 7, 2011 to August 2015, together with a four per cent interest per annum.
The CCJ, in its ruling, instituted a five-year limitation period for the settlement of cases involving the unlawful collection of taxes which contradicts the Treaty of Chaguaramas. “The court holds that a five-year limitation period is appropriate, and will protect States from stale claims in respect of which there would be inherent difficulties in trying to produce documentary or oral evidence. It will, above all, encourage claimants to file suit in a timely fashion,” Sir Dennis stated.

Additionally, Guyana has also been ordered to pay 70 per cent of the cost of the court proceedings, which are to be taxed if not agreed upon. This ruling comes on the heels of Rudisa Beverages’s win against the Guyana Government.
Rudisa Beverages had taken Guyana to court over a “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 Government of Guyana time to repay US$6M, which the two parties agreed to, by January 31, 2016. However, Williams had explained that what is noteworthy is the fact that in the case of RUDISA, the Government of Guyana did not lead evidence to show that the tax was transferred.
As such, he had noted that it was the Government’s intention to lead such evidence in the SM Jaleel case.

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.