The Areeba case

By William Yaw Owusu

Wednesday,May 3,2007
The Commercial Court in Accra will on May 31, decide on whether or not to stay proceedings pending arbitration in the case in which Richmond Aggrey, a Ghanaian businessman is claiming 20 per cent shares in Scancom Limited, operators of Areeba mobile phone service.

The court, presided over by Justice Henry Kwofie took the decision following extensive arguments on the issue of the stay of proceedings by both the defendants and the plaintiff yesterday.

The substantive suit filed by Mr. Aggrey, cites Investcom Consortium Holdings S.A. of Beirut, Lebanon, Areeba as well as Grandview Management of Texas, United States as the defendants and the application for stay of proceedings had been filed by Investcom who are majority shareholders of Areeba.

The court, on July 14, last year, granted Mr. Aggrey an ex-parte application to restrain the defendants from going ahead to conclude a merger agreement with the MTN Company of South Africa.


Mr. Aggrey had argued that “continuing and / or concluding a merger with and / or acquisition of Investment LLC by MTN without taking into account and/or providing for the plaintiff’s 20 per cent shares in Scancom Limited will occasion the loss of his shareholding in the company by reason of the accrual of the rights of MTN Group as third party.”


Following the development, Areeba filed an application on July 24, to strike out Mr. Aggrey’s action “in part or whole” on the grounds that he failed to adhere to procedures in filing the application.


The trial court on October 20, however, ruled that the processes followed by Mr Aggrey in instituting the suit were proper and ordered Areeba to file its defence within 14 days.


Consequently, Areeba filed a notice of appeal to challenge the court’s ruling and another motion on notice to stay proceedings pending the appeal but by Justice Kwofie dismissed it on December 8, and awarded ¢10 million cost against Areeba.

Areeba then went to the Court of Appeal to challenge the trial court’s decision and this was again dismissed by a three member panel on March 27, and awarded ¢5 million cost against the appellant.

The plaintiff then filed an application for judgement in default of a defence against Areeba but the second defendant filed an application for extention of time within which to file their defence.

The court on April 17, awarded ¢8 million cost against Areeba for the delay.

When the case was called Benson Nustukpui representing Areeba told the court that “we have this morning filed our statement of defence and we no longer wish to move our application for extention of time”.

Yonny Kulendi, counsel for Mr. Aggrey then said “we are by this withdrawing our application for judgement in default”.

The court then struck out the two applications for the case to take its normal course and again awarded five million cedis each against the Areeba and Investcom in favour of the plaintiff.

Moving the motion for stay of proceedings filed on April 16, Felix Ntrakwah, counsel for Investcom said, “The institution of the whole action by the plaintiff without recourse to the shareholder’s agreement which stipulates mandatory arbitration amounts to a breach”.

‘There is a shareholders agreement which we have exhibited and it is clear that there should be arbitration if there was a disagreement. There is no conflict of law in this matter and the court has an obligation to refer this matter to arbitration”.

He further argued that they were not in contempt of the court “if we are seeking to enforce our contractual rights”.

Responding, Mr. Kulendi said Investcom’s application had been brought in bad faith adding “this court should not allow its jurisdiction to be subordinated by an inferior tribunal”

He said once the Investcom and Areeba had averred that the plaintiff ceased to be a shareholder since 1999, Mr. Aggrey could not be part of the arbitration process,
adding “until the court declares whether the plaintiff is a shareholder he cannot assert his rights under the shareholders agreement”.

“The defendants should allow the court to determine our status before we can see whether the dispute belongs to arbitration”.

He further argued that the United Kingdom (London to be precise) where the applicant was seeking to arbitrate had not ratified the United Nations International Convention on Arbitration and said the rules of the court makes it mandatory for the courts in Ghana to settle disputes through arbitration.

Thaddeus Sory counsel for Grandview, also a defendant associated himself with the plaintiff and said he had also filed an interlocutory application to restrain his co defendant from going for the arbitration.

Mr. Nustukpui also associated himself with Investcom and said that ‘We are prepared and willing to submit ourselves to arbitration