CCJ RULES T&T DID NOT BREACH OBLIGATIONS IN BAILING OUT CLICO
The Caribbean Court of Justice (CCJ) dismissed the claim of Ellis Richards, Spencer Thomas, and others in the case of The Medical Benefits Board and Others v The State of Trinidad and Tobago. The claimants were Antigua and Barbuda and Grenada nationals, all policyholders of British American Insurance Company Limited (BAICO), a subsidiary of CL Financial (CLF), the financial conglomerate resident in Trinidad and Tobago. After the collapse of CLF in early 2009, Defendant decided to rescue or bail out CLF and its Trinidad and Tobago subsidiaries, CLICO Investment Bank (CIB), Colonial Life Insurance Company (Trinidad) Limited (CLICO), and British American Insurance Company (Trinidad) Limited (BAT). Defendant engaged in a series of measures, including the assumption of control of CLICO and BAT, provision of liquidity support, injection of funds, and the purchase of the rights of some policyholders of CLICO and BAT.
The Court concluded that Trinidad and Tobago’s intervention in and bailout of CLF and its Trinidadian subsidiaries were properly within the exception provided in Article 30(2), that is, activities in a Member State involving the exercise of governmental authority… This meant that the claims alleging breaches of Articles 36, 37, and 38 at the instance of BAICO policyholders were not justifiable by the Court. Two broad issues were examined in the present judgment under the headings: i whether the Defendant’s actions in bailing out CLICO and BAT constituted a breach of Article 184(1)(j) of the Revised Treaty of Chaguaramas (‘RTC’).
The Court interpreted in good faith and applied the ordinary meaning of the articles of the RTC, which fall under Chapter Eight, titled: ‘Competition Policy and Consumer Protection’. In so doing, the Court found that Chapter Eight of the RTC is concerned with encouraging a strong and vibrant Community market by Member States’ enactment of legislation and regulations prohibiting anti-competitive conduct, promoting fair competition, promoting the interests of consumers, protecting consumers, and achieving harmonisation of competition policies throughout the Community. It did not create liability for individual Member States of the Community.
The allegations of breaches of Article 7 and Article 184(1)(j) both depended on whether the Claimants were consumers. The Court considered three preliminary issues to determine whether the Claimants qualified as consumers to pursue the alleged breaches of the provisions of the RTC, not all of which were fully argued by the parties. The Court found that Article 184(1)(j), which required Member States to provide “adequate and effective redress for consumers”, could not be read in isolation from its broader legal context. It was not permissible to single out a specific provision from the list, for example, Article 184(1)(j), and give it a special legal status which the other provisions in Article 184 (1) cannot bear.
The Court also considered whether there was a breach of Article 7 of the Treaty. 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 the right and that discrimination in question must be based on nationality only. There was no obligation to extend any relief to institutions outside of the Defendant Member State and, therefore, no right for the Claimants to obtain the relief they sought.