Cayman Grand Court dismisses important judicial review against the Cayman Water Authority and Cayman Government

22/08/14

The Cayman Grand Court has dismissed a significant judicial review application brought by the Cayman Water Company.

In Cayman Water Company Limited v. Government of the Cayman Islands and Water Authority of the Cayman Islands heard by the Chief Justice, the Grand Court on 1^st and 2^nd April 2014 (with judgment being approved on 20^th August 2014) dismissed an application for judicial review brought by the Cayman Water Company Limited.

The Applicant Water Company, as concessionaire of an exclusive licence to produce and supply potable water in part of Cayman, had initially sought wide-ranging relief against both the Cayman Government and Cayman Water Authority seeking to challenge a rate cap adjustment pricing mechanism and claiming amongst other things that the Authority had no power to impose such a mechanism and that it interfered with the Applicant’s pre-existing statutory rights.

At the hearing the Applicant confined its application to seeking declarations as to: (i) the necessity for a tender process (which the Water Authority had consistently maintained was not required), (ii) the identity of the party with which the Applicant was required to negotiate for a new concession and (iii) whether a new licence was required (as the Water Authority contended) or merely the grant of a new concession from the Governor.

The Chief Justice, accepting all of the submissions made on behalf of the Water Authority and the Governor, held that: (i) no tender process was required and that (ii) a new concession had to be granted by the Governor prior to the negotiations so that the Water Authority acted as an agent for the Governor in those negotiations. The key question (described by the Chief Justice as of ‘real significance’ to the Applicant) was whether a new licence was required following the grant of a concession because if it was not the Water Authority would enjoy no separate powers once the concession had been awarded. However, the Chief Justice accepted the argument for the Water Authority that a new licence from the Water Authority was required following the grant of any new concession to the Applicant.

The case is an important ruling on statutory powers in the context of commercial regulatory judicial review and demonstrates the need to construe interlocking statutory provisions with care.

The judgment is here.