Ellis Richards & Ors. v. The State of Trinidad and Tobago (AGOJ2021/001), a case in its Original Jurisdiction, was decided yesterday by the Caribbean Court of Justice. The CCJ threw out most of the claims made by policyholders of British American Insurance Company Limited. They said that Trinidad and Tobago had broken the Revised Treaty of Chaguaramas when CL Financial, a Trinidad and Tobago conglomerate, went bankrupt. The CCJ made a decision on a preliminary point brought up at the case management stage and threw out most of the claims.
The Claimants, who were nationals of and institutions established in Antigua and Barbuda and Grenada, argued that the measures taken by the Government of Trinidad and Tobago by its intervention in and assistance to CL Financial and its subsidiaries, CLICO Investment Bank Limited, Colonial Life Insurance Company (Trinidad) Limited and British American Insurance Company (Trinidad) Limited were discriminatory and breached Articles 7, 36, 37 and 38 of the Revised Treaty.
The Claimants alleged that the bailout measures were taken to rescue CLF and CLICO, CIB and BAT, all subsidiaries registered in Trinidad and Tobago. This same protection was not offered to them as policyholders of British American Insurance Company Limited. The Central Bank of Trinidad and Tobago also took steps to keep them from being part of the rescue plan. They also said that the measures made it harder to offer insurance services across borders, which was against Articles 36, 37, and 38 of the Revised Treaty.
When Trinidad and Tobago filed its defence before the Court, it contended that the actions complained about by the Claimants fell outside the scope of the Revised Treaty. In their opinion, the actions were “activities in a Member State involving the exercise of government authority” (Articles 30(2) and (3)), which meant that Chapter Three of the Revised Treaty did not apply to them. When this issue was raised at the case management stage, the Court directed the parties to make submissions on two preliminary issues.
First, assuming, for the sake of argument, that the things the Claimants say in their Originating Application are true, do the actions of the State of Trinidad and Tobago fall outside the scope of Chapter Three of the Revised Treaty because they are covered by Article 30(2) and Article 30(3)? And, if the answer was yes, what are the consequences of these proceedings?
Article 30(2) of the Revised Treaty says that activities in a Member State that involve the use of government power are not covered by the Treaty’s operation chapter.
Article 30.3. says that “activities involving the exercise of government authority” means “activities that are neither done for profit nor in competition with one or more economic enterprises.”
The Court said that Chapter Three of the Revised Treaty is about four fundamental freedoms or rights that are at the heart of the CARICOM Single Market Economy. These are the right to set up a business, the right to provide services, the freedom to move capital, and the freedom of movement of Community nationals.
One of the most important parts of the Revised Treaty that helps achieve its goal and purpose is Chapter Three’s requirements for Member States and the rights that come with them. The Court said that by meeting these obligations, the Member States agreed to give up some of their sovereignty for the good of everyone.
But adding Article 30 to the Treaty made it clear that Member States can still do some things that Chapter Three doesn’t cover. If a Member State does one of these things that aren’t allowed, it doesn’t have to follow the rules and restrictions in the Chapter, and the Court can and must say so.
When the Claimant’s papers were looked at, it seemed that Trinidad and Tobago’s actions were not commercial. There was no evidence that the intervention by the Government of Trinidad and Tobago, the Ministry of Finance, and the Central Bank was done to make money or to compete with businesses in Trinidad and Tobago or the Member States. The activities included, among other things, legal, accounting, and management help from the Central Bank, as well as the direct use of Trinidad and Tobago’s financial resources to lessen the effects of the private company CLF’s financial collapse.
In this situation, the Court threw out the claims related to the following Articles of the Revised Treaty: Article 36 (alleged breach of duty not to impose new restrictions on the provision of services), Article 37 (alleged breach of duty not to impose discriminatory restrictions on the provision of services), Article 38 (alleged breach of duty not to impose discriminatory restrictions on banking, insurance, and other financial services), and Article 7. The claim that there was a violation of Article 184(1)(j) (failure to promote the interests of consumers in the Community) and Article 7 (insofar as it applies to that claim) by the Claimants was not thrown out. The Court put off deciding on costs until the end of the case.
Justices Winston Anderson, Maureen Rajnauth-Lee, Andrew Burgess, and Peter Jamadar, as well as President Mr Justice Adrian Saunders, heard the case.
The Claimants were represented by Simon Davenport KC, Dr. Kenny Anthony, Robert Strang, Gregory Pantin, Matthew Happold, George Kirnon, and Miguel Vasquez. The people who spoke for the State of Trinidad and Tobago were Mrs. Deborah Peake SC, Ms. Tamara Toolsie, Mr. Brent James, Mr. Murvani Ojah Maharaj, and Ms. Karissa Singh.
