Hush-hush settlement reached in Customs user-fee case
Published:Sunday | April 24, 2011 | 12:00 AM
Barbara Gayle, Court Reporter
An-out-of-court settlement has been reached in the suit brought by Joey Issa's Cool Petroleum against the Jamaican Government to recover Customs user fees amounting to more than J$1.4 billion.
Lawyers in the case were tight-lipped about the terms of the settlement, saying they were constrained by a confidentially clause barring disclosure of the details.
Cool Petroleum, which operates in the gasolene market under the Shell and Cool Oasis brands, had filed the suit in the Supreme Court last year contending that the user fee charged at the island's ports was unconstitutional.
The Government filed a defence contending otherwise.
The fee was initially introduced as a two per cent charge in 2003 and later adjusted to a five per cent levy on imports in 2009.
A potential win by Issa was widely seen as having implications for the Government, which would have had to refund billions of dollars to businesses.
The case came for hearing in February and was put off, but word of a settlement began leaking out into the business community over the past week or two.
A settlement suggests some form of victory for Issa and Cool, but as one lawyer explained Thursday, the confidentiality agreement bars even that sort of disclosure.
One of the lawyers in the case said the settlement states: "Matter settled as endorsed on counsel's brief." To offer more, he said, would breach the confidentiality agreement.
Cool Petroleum contended that it had paid out $1.4 billion since the Customs user fee came into effect.
There was a dispute as to the amount, with government lawyers contending that the amount was lower.
Cool's case was marshalled by Queen's Counsels Richard Mahfood and Dr Lloyd Barnett. Legal sources told The Gleaner in January that at the root of Cool's argument was that the minister of finance did not have the power to create law without the imprimatur of Parliament, and that limits had been laid down in this regard by Section 257 of the Constitution.
The section says: "The minister may make regulation for the better carrying out of the provisions of the Customs laws and for the prevention of fraud on the revenue and may in such regulations prescribe fees, rents or charges to be paid in respect of any matter therein referred to; and such regulations shall be published in the Gazette."
The minister "by order subject to affirmative resolution in the House of Representative" has the authority, under the Customs Act to "amend or vary any such penalty".
The Customs user fee is applied to the cost insurance freight value of all imports, except for material used in manufacturing under Section 807 of the US tax code, which are designated for re-export.