The COMESA Court of Justice delivered its judgment in Agiliss v Republic of Mauritius on 4 February 2025, where it declared that safeguard measures against the importation of edible oil into Mauritius fell afoul of COMESA rules. Judgment-Agiliss-v-The-Republic-Mauritius-and-4-Others-Ref-No-1-of-2019-4th-Feb-2025
The reference was brought by Agiliss, a Mauritius-based company that imported edible oil in pre-packaged containers from Egypt. Agiliss had made significant investments and had cut into the market share of MOROIL, a monopoly undertaking in the edible oils sector.
The Mauritian government sought to apply a safeguard measure by imposing a 10% import tariff on edible oils from COMESA member countries, in a letter dated 14 November 2018 to the COMESA Secretary General.
Safeguard Measures in the COMESA trade regime
Safeguard measures are temporary measures that a member state of COMESA may apply where trade liberalisation measures have actionable negative impact on its domestic market. Safeguards are governed by Article 61 of the COMESA Treaty, which sets out the thresholds for the application of safeguard measures by a Member State. Article 61 allows a Member State to employ safeguard measures where trade liberalisation measures cause ‘serious disturbances’ in the economy of a Member State. The Member State may impose the safeguard measures after informing the Secretary General of COMESA and the other Member States of the measure. The measures shall be in force for one year but may be extended by the Council of Ministers upon proof by the Member State that it has taken reasonable steps to arrest the imbalances that necessitated the imposition of the measures and that the measures are applied on a non-discriminatory basis.
However, the COMESA Regulations on Trade Remedy Measures, which the COMESA Council made to support and supplement the Treaty provisions, are contradictory to the Treaty, a fact which the Court observed and recommended that the Council of Ministers amend to align to the Treaty. While the Treaty provides ‘serious disturbances’ as the threshold within which safeguards may be applied, under Regulation 7.1 the threshold is ‘serious injury to the domestic industry that produces like or competing products.’ Further, the Treaty sets the timeline as a year, but Regulation 12.1 sets the initial term for which safeguards may be applied as 4 years. In settling the dispute, however, the Court found these differing provisions to be of no consequence.
The Applicant’s case
The Applicant, Agiliss Ltd, filed the reference complaining that the safeguard measures had not been imposed for reasons that met the legal threshold. Firstly, it argued that the government of Mauritius had not demonstrated any serious disturbance or serious threat to the domestic industry of Mauritius. If anything, its competitor, MOROIL, was equally an importer. Secondly, it argued that procedurally, no proper investigations and consultations had been undertaken to show that there had been adverse effects warranting the application of safeguard measures. In addition, it argued that the purported investigation that had been carried out had ignored the positive effects on competition, and by extension, the Mauritian consumer, of its entry into the edible oils market, thus breaking MOROIL’s monopoly. Finally, the Applicant argued that the safeguards were a guise for protecting MOROIL’s monopoly. The Applicant called two witnesses, the Chief Executive of the Applicant, and an expert witness to testify on its behalf.
The Respondent’s case
The Respondent, the Republic of Mauritius, submitted that the safeguards were necessary because there had been an increase in imports, and that it had carried out an investigation, which resulted in a report, titled Investigation on Imports of Oil. The Respondent submitted that its report established the necessity of the safeguard measures. Further, it submitted that it had not complied with Regulation 15, requiring notification of the investigation on the necessity of safeguards to the Trade Remedies Committee of COMESA, because the committee had not yet been established at the time it sought to impose and enforce the safeguard measures. The Respondent did not call in any witness to buttress its submissions nor to rebut the evidence of the Applicant’s expert witness.
The Determination
The Court held that based on the evidence tabled, the Respondent had failed to establish a reasonable cause for the imposition of safeguards. Firstly, the Court found that the Respondent had not acted in a legally sound procedural manner, in that it had not invited comments nor opinions from concerned parties, including the Applicant. Secondly, the Court found that the investigation report could not be the basis for safeguards, as it had not established that the threshold of a serious disturbance or serious threat to the domestic industry had been met. There had, on the contrary, been a linear increase in imports by a competitor, which on balance, had been good for the Mauritian consumer.
The Applicant had sought among other remedies, an order prohibiting the Respondent from imposing any customs duties or any other non-tariff barriers to edible oil imports into Mauritius. The Court declined to grant this order, holding that it was tantamount to a permanent injunction against a right that Member States had to impose such measures as occasion demanded and for justifiable reasons. However, the Court granted a prohibition order against the imposition of a 10% customs duty as the Respondent had sought through its letter dated 14 November 2018.
This determination strengthens the COMESA Common Market by breathing life into COMESA’s Treaty provisions and setting the boundaries of legality within which states must act to the intent that the Common Market is to function smoothly and effectively in the interest of the Common Market’s consumers and producers.
