Cabinet’s ability to grant wide-ranging, long-term duty waivers is necessary to help attract major inward investment to the Cayman Islands, according to the lawyer representing government in Doctors Hospital’s challenge to Health City’s decades-long concessions deal.
On Thursday, Tom Hickman, QC, told Justice Richard Williams, who is presiding over the judicial review hearing, that there is no basis for implying the government’s contracts with Health City and Aster Caribbean Holdings, were unlawful, and that Cabinet has the discretion to grant waivers as a means to encourage investment into the Cayman Islands. The ability to grant such waivers, he said, was an “important part of the economic strategy of government”.
In his submissions, Hickman described the court challenge over Health City’s tax concessions as “academic” and filed too late – more than a decade after the contract was signed granting the duty and work-permit fee waivers to the East End hospital.
He also argued that Doctors Hospital was not a party to the contract and therefore lacks standing on the issue.
He said Doctors Hospital had not challenged the contracts when they were signed, and was using this judicial review as a platform to indirectly attack Health City and Aster and their contractual agreements with the government. Health City and Aster are listed as interested parties in the judicial review, while the Cayman Islands government is the main respondent.
The United Democratic Party government granted waivers to Dr. Devi Shetty’s Narayana Hrudayalaya Private Ltd, which created Health City, in a contract signed in 2010, while the Progressives-led administration agreed to similar concessions for Aster when it signed a deal with the company in 2020 to pave the way for a proposed hospital in West Bay.
The court had heard on Wednesday from Doctors Hospital’s attorney Chris Buttler, QC, that while the waivers granted hundreds of millions of dollars in concessions for the hospitals over decades, Doctors Hospital had no such deal and had paid more than a million dollars in duty on medical supplies over three years.
Hickman argued that, because the contracts with the hospital companies were not unlawful, this issue of whether the current and future governments could be bound to continue to grant the waivers was “an academic one”.
He also refuted an assertion made by Buttler that waivers could only be granted on individual or groups of items once a duty declaration had been filed, rather than being granted as a blanket measure that spans decades.
Hickman said the Customs and Border Control Act grants Cabinet discretion to give waivers, and it would be entirely impractical for Cabinet to have to make a duty waiver determination on every item a company imports into the country.
The relevant section of that act states: “The Cabinet may, in any particular case, waive or order refund of any duty, package tax or part of any duty or package tax which would otherwise be payable or would not be liable to refund under this Act, subject to such conditions as the Cabinet may think fit to impose.”
Hickman told the court, “It is very difficult to see how the Cabinet can be expected to sit and determine every single individual application for a waiver on duty… on every item that has arrived on the shores of these islands. It’s obviously intended for Cabinet to use this power for strategic purposes which would require forward planning and agreements … because you want to encourage investment into the Cayman Islands.”
He also addressed Buttler’s argument that no policy is publicly available that outlines the criteria for granting duty waivers, saying that even if it is desirable to have such a policy, there is no legal requirement to have one.
Institutionally registered facilities
Buttler, who also spoke on Thursday morning, noted that until less than a week ago, when government issued guidelines relating to institutionally registered medical facilities, there were no criteria relating to the designation of facilities at which institutionally registered medical staff could practise.
Currently, three facilities are institutionally registered – Health City, the government’s Health Services Authority, and Total Health.
Buttler said the new guidelines, issued on Friday, did not include a review process to ensure that standards are maintained for such facilities. He told the court, “Once designated, they cannot be left to their own devices. There has to be a review process.”
In response, Hickman told the judge that he had been instructed that such a review process would be implemented.
Thursday’s hearing ended mid-afternoon, earlier than expected, after Hickman presented the court with a late affidavit written in response to assertions made by Buttler that institutionally registered medical staff were not required to meet the same standards of education, qualification and experience that their counterparts registered on what is known as a ‘Principal List’.
Hickman said his client did not accept that under the current two-tier system of medical practitioners registered under the Institutional List and the Principal List that there was “any risk to patient safety”.
He pointed out that under the Health Practice Act, all health facilities, including those which are designated as institutionally registered, are subject to inspections and certification. He also noted that, under the act, all registered practitioners, on either list, are required by the Medical and Dental Council “to undertake such continuing professional education as the Council may determine is in the interests of protecting the health of the public”.
The hearing is scheduled to continue on Friday.
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