The claim brought against the Government of Trinidad and Tobago by policy holders of Antigua and Barbuda, Grenada and by extension the Eastern Caribbean alleging that it was bias in its decision to bail out citizens of that country only following the collapse of CL Financial and its subsidiary companies in 2009 has been dismissed.
Justice Adrian Saunders, President of the Caribbean Court of Justice (CCJ) said as he read out the judgment on October 22 that the Court considered that the defendant, the Government of Trinidad and Tobago, had no obligation to extend relief to institutions outside of the state.
“Therefore, no right in the claimants to obtain the relief is sought,” Justice Saunders read in the Court’s ruling.
“The claim is dismissed, and the parties ordered to bear their own costs,” the Court further ruled.
The judgment was handed down following two days of hearings on the matter held on April 29 and 30, 2024 after the matter was taken to the CCJ on the grounds that the claimants’ residents of Antigua and Barbuda, Grenada and the Eastern Caribbean were all policy holders of British American Company Ltd (BAICO), a subsidiary company of CLF.
Following the collapse of the Trinidadian financial conglomerate in 2009, the Government of that country engaged in a series of measures to mitigate the effects of the collapse of policy holders of British American Trinidad (BAT).
And the claimants brought a claim alleging that the Government of Trinidad and Tobago breached Articles 7, 36, 37, 38 and 184(1)(j) of the Revised Treaty of Chaguaramas (RTC).
However, in the ruling, Justice Saunders stated that the Court had concluded from the facts that the defendant’s intervention and bail out of CLF and its Trinidadian subsidiaries were done properly within the exception provided in Article 32 of the RTC.
“That is, activities in a member state involving the exercise of governmental authority,” the Court stated in its ruling.
Subsequently, this meant that the claims alleging breaches in Articles 36, 37 and 38 to BAICO policy holders were not the issue by the Court.
“And that as the impugned activities did not fall under the scope of Chapter 3 of the RTC, the claimants could not rely on them as grounds for the breach of Article 7.”
Similarly, Justice Saunders stated that the Court noted that Article 184 was broadly titled ‘Competition Policy and Consumer Protection’ and rather than considering the said Article in isolation it referred to the surrounding provisions under Chapter 8 of the RTC such as Articles 169 – which sets out the objectives of the Community Competition policy – and Article 170, which sets out what is expected from the Community states to achieve the objectives set out in Article 169.
And in so doing, the Court found that Chapter 8 of the RTC was concerned with encouraging a strong and vibrant Community market through the enactment of legislation prohibiting anti-competitive conduct and promoting fair competition and promoting the interest of consumers.
But in the absence of such legislation and regulations, the Court presumed failure by Article 184 and that it did not create liability for individual states within CARICOM.
The Court further said in its judgment that the allegations of breaches in Article 7 and 184(1)(j) were both dependent on whether the claimants were consumers and based on that fact that this issue was not argued by the parties, the Court decided not to decide on the resolution of that issue.
The Court determined that Article 184(1)(j) which required member states to provide adequate and effective redress for consumers could not be read in isolation from legal or juridical context.
According to Justice Saunders, it was also significant to consider the institutional arrangements that had been established as well, as the nature of the language used to impose obligations.
The Court noted that the language used in Chapter 8 of the RTC in general and specifically in Article 184 is not always conducive to allocating state liability for breach.
And that Article 184 is concerned with the promotion of consumer interest and that member states were then obliged to promote the interest of consumers in the Community through appropriate measures.
The Court stated that it was therefore not permissible to extract a single provision from the list to give it a special legal status.
During the hearing, the claimants argued that member states cannot site the peculiarities of its own legal order to avoid its obligations under international law, particularly the RTC.
Further the claimants argued that the defendant exercised emergency powers to prevent BAICO policy holders from enforcing rights to CLF assets on an equal footing with BAT policy holders.
But the defendants rebutted saying that it would be improper for the Trinidadian Parliament to amend the Central Bank Act and permit the exercise of emergency powers by the Central Bank of Trinidad and Tobago in respect of BAICO.
The court noted that this argument against extra territorial regulation accorded with the submissions of counsel for the Caribbean Community that legislation adopted by a member state did not apply extra territorially.
And that the RTC does not contain language which obliges member states to provide mechanisms to facilitate the extra territorial reach of its legislative, political and juridical decisions to other member states.
The Court then considered whether there was a breach of Article 7 of the Treaty stating ion the judgment that Article 7 was not a free-standing provision whose breach may give rise to a claim at large.
And that any allegation of a breach of Article 7 must be accompanied by and must point to a treaty right in respect of which the claimant must prove discrimination in the enjoyment of that right, and any such discrimination must be based on nationality only.
Additionally, to establish discrimination under Article 7, the claimants must have established that they were treated worse or less favourably than persons whose circumstances were similar to theirs, except for their and the comparators nationality and that there was no objective and reasonable justification for the difference of treatment and that the worse, or less favourable treatment occurred in the context of activity that was within the scope of the Revised Treaty.
The court found that the circumstances of policy holders of CLICO, BAT and CMB were not similar to BAICO policy holders and the Court noted that i the claimant’s arguments were correct, it would mean that the defendant would have been responsible for bailing out all BAICO policy holders in other Caribbean territories.
The Court found that it could not be within the contemplation of the framers of the RTC that the member states in said circumstances will be obliged to compensate all BAICO policy holders in all CARICOM states for their loss and damage.
It accepted that this was an objective and the reasonable justification of the alleged difference in treatment of the companies.