THE HIGH Court has ruled in favour of an international tobacco distributor operating under a free zone designation after the Ministry of Health tried to shut it down for failing to obtain the necessary licences.

Justice Frank Seepersad delivered his ruling on February 24.

The company, North American Trading Company Ltd, of the Intercontinental Business Park, Free Zone Complex in D’Abadie, operated for nearly two decades and was registered with the Free Zones Company Ltd, under the Free Zone Act, which grants approved businesses certain tax exemptions and concessions. The Free Zone Act has since been repealed and replaced by the Special Economic Zones Act No 1 of 2022.

The company imports tobacco products from international manufacturers, storing them in its local warehouse before exporting them to retailers across the Caribbean and Latin America.

In its lawsuit, North American Trading said it did not distribute or retail its products in TT.

The legal dispute arose in January 2022, when the company was notified of the operationalisation of a new special economic zone regime.

In November 2022, customs and police officers staged a warrantless raid on the company’s premises. In February 2023, the ministry’s Tobacco Control Unit (TCU) told the company it could not continue operations without the required licences under the Tobacco Control Act.

The company claimed this decision led to substantial financial losses, estimated at US$979,714, as planned imports and exports were halted. In its lawsuit, the company argued that the ministry’s directive was unreasonable and irrational, contending that the TCU had no jurisdiction over free-zone operations.

In his ruling, Seepersad held the TCU operated under a misapprehension of fact and law, failing to do a proper fact-finding exercise before issuing its directive.

The judge noted that under the Free Zone Act, the regulatory power of the TCU under the Tobacco Control Act did not extend to free zone areas designated for international trade. Seepersad held that the Ministry of Health lacked lawful authority to suspend the operations of an entity operating within a free zone, as such jurisdiction lies exclusively with the Free Zone Company.

He also noted that the Attorney General on May 16, 2023, provided advice to the Health Ministry, which, in turn, resiled from its original position.

However, Seepersad said the February 9 decision affected the company significantly, ruling that it was “unreasonable and illegal, fundamentally unfair and amounted to arbitrary exercise of power...

“Evidently, the TCU misunderstood and or misapplied the law, having obtained inaccurate legal advice and its action imposed unreasonable and unjustified constraints upon the claimant’s operations.”

The ruling also criticised statutory bodies for frequent instances of overreach, warning that the court will not tolerate unauthorised or improper exercises of power that infringe upon the rights of citizens.

“When errors are made they cannot be whitewashed, and those responsible s