Guyana loses appeal in Canada to have Demerara Gold case thrown out

The government has lost an appeal in Canada to have a lawsuit by a Canadian company over the ‘Demerara Gold’ brand name stayed or thrown out until the determination of a similar case in New York.

Guyana is attempting to claim the name Demerara Gold as its own but Canadian company Bedessee Imports Ltd filed lawsuits in Canada and New York following comments by Agriculture Minister Robert Persaud accusing the company of deceit. The sugar sold by Bedessee under the name Demerara Gold is not produced here. Local state firm, the Guyana Sugar Corporation (GuySuCo) also sells its sugar under the name Demerara Gold.

The Bedessee group of companies is owned by a Guyanese-born man, Lionel Bedessee but is now operated by his two sons. The duo filed two lawsuits simultaneously in Canada and New York following an onslaught by Persaud on the company over the use of the words on its sugar which is not produced in Guyana. The minister had accused the company of deceit among other things and the sons decided to take the battle to the courts. The company did not only name Persaud and GuySuCo as defendants but in the lawsuit in Canada, named Guyana Observer, NCN, Kaieteur News, Guyana Times and Guyana News Today as well.

In June last, Judge G.R Strathy threw out Persaud’s and GuySuCo’s attempts to have the Canadian claim dismissed on the grounds of state immunity. Judge Strathy in dismissing the motion had found that the Minister’s statements fell within the commercial activity exception to state immunity provided for in Section 5 of the State Immunity Act.

However, according to the judgment seen by this newspaper, in their appeal, Persaud and GuySuCo argued that the judge erred in placing undue emphasis on the purpose of the minister’s statements, and that he should have given primary attention to the nature of those statements, namely, statements by a minister speaking on behalf of the Government of Guyana in the public interest of Guyana. They stated that the judge also ignored the constitutional dimension of the minister’s role and the statement.

Judges Robert J. Sharpe, R.P Armstrong and Paul Rouleau on October 22 dismissed the appeal filed by Persaud and GuySuCo and awarded costs to the tune of CDN$20 000 to the respondent Bedessee Imports Ltd. “We are unable to accept these submissions,” the three judges wrote in their judgment pointing to the ruling of the case of Kuwait Airways Corp. v. Iraq. 2010 SCC 40, which was released the day before the appeal was heard in Canada’s Supreme Court and stated in paragraph 30:

“It is therefore not sufficient to ask whether the act in question was the result of a state decision and whether it was performed to protect a state interest or attain a public policy objective. If that were the case, all acts of a state or even of a state-controlled organisation would be considered sovereign acts.”

The judges stated that Judge Strathy considered the statements of Minister Persaud in the context of an ongoing trademark dispute between the state owned GuySuCo and the Bedessee. “The statements promoted Guyana’s ‘brand’ and disparaged the brand of a competitor. To permit a lawsuit by Bedessee in relation to such activity is neither an affront to the dignity of the Guyanese state nor an interference with its sovereign functions,” the judges ruled.
They said the conclusion was supported by the judge’s factual findings which, in turn, were well supported by the evidence and as such the three members of the judiciary said they “agree with his careful reasons and we see no basis to interfere.”

They noted that in the case involving the Kuwait Airlines, the Supreme Court held that it is up to the party opposing the state asserting its immunity to establish that it may rely on an exception to this immunity. It was pointed out that in his reasons, Judge Strathy applied the law as it stood when he decided the case and placed the onus on the Persaud and GuySuCo to make out the immunity. “However, it is apparent to us from his reasons that the placement of the onus played no role in the motion judge’s decision. Accordingly, the appeal is dismissed,” the judges ruled.

In his June ruling Judge Strathy had said that  Demerara sugar, made directly from the juice of the sugar cane and noted for its coarse and sticky amber crystals, had its origins in the early 1800s in the plantations of the Demerara district of what was then British Guiana, now the Cooperative Republic of Guyana. He had said that today, sugar calling itself ‘Demerara,’ is produced in several countries, including Mauritius, Barbados, India and Malawi, as well as Guyana and this has been a source of concern for GuySuCo.

According to the background of the case, as provided in the decision seen by this newspaper, Bedessee was founded by Lionel Bedessee, who went to Canada from Guyana in 1971. Then, it was difficult to find Caribbean foods in Ontario and Bedessee began to import food from that region.  In 1977, he started a retail store selling Caribbean food on Queen Street West in Toronto and from that store, the business has grown and prospered to the extent that at present it  operates from a 46,000 square foot warehouse and manufacturing facility in Scarborough. Bedessee Imports Inc. was incorporated on September 23, 1985 to carry on the same business in the United States.  It has a warehouse in Brooklyn, New York and a wholesale outlet in Florida, both of which are now managed by the founder’s sons.

The products marketed by Bedessee include raw cane sugar from Mauritius, which it sells under the trademark ‘Demerara Gold’, a mark it has been using for sugar and other products since at least 1984. The product label contains a map of Guyana. Bedessee also markets a brown sugar product described as ‘Guyanese Pride,’ which also has a map of Guyana on the label. Neither product contains Guyanese Demerara sugar.

About Guyana, Judge Strathy had said “A small country, it faces significant economic challenges and the sugar industry plays an important role in the economy. Some 500,000 Guyanese expatriates, referred to as the “Diaspora,” live abroad, principally in Canada, Great Britain and the United States. The evidence is that there is a passionate and patriotic relationship between the Diaspora and Guyana and that the Diaspora is an important constituency for the Guyanese government and for Guyanese businesses exporting products abroad”. He had said Guyana’s sugar industry has been one of the most important sectors of its economy since its colonial beginning in 1816.

While Bedessee started using the name ‘Demerara Gold’ as a trademark for sugar and other products in Canada and the United States since at least 1984, it was not until 2003 that GuySuCo started using the name prior to which “its marketing was relatively unsophisticated.”

“It sold sugar for export primarily in the Caribbean region, and the sugar was sold ‘nameless’ in unlabeled 50 kg. bags with unsophisticated packaging,” the ruling had said.

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