Court Declines To Set Aside Decision On Areeba

By William Yaw Owusu

Wednesday, 09 May 2007
The Commercial Court in Accra, has said it will not set aside its decision to enter interlocutory judgement in default of a defence against Investcom Consortium Holdings S.A , majority shareholders of Scancom Limited, operators of Areeba mobile phone service.

The court, presided over by Justice Cecilia H. Sowah took the decision on April 2 in favour of David Andreas Hesse, the lawyer who has sued the company and one other for breach of a shareholders’ agreement.

Following the decision, Investcom filed a motion on notice on April 13, to ask the court to set aside its judgement but this was dismissed by Justice Sowah, who also awarded ¢5 million cost against the applicant.

Additionally, the court stayed proceedings on the assessment of damages against Investcom for Mr. Hesse "to proceed with his action against Areeba" who are also cited in the suit.

On November 29, 2006, Mr. Hesse sued Investcom and Areeba seeking, among other things, an order to reverse an alleged capital increase and dilution of his shares from six to two per cent and the transfer of the shares from him to Investcom.

The plaintiff who is handling his own case, also wants an order to restore his six per cent shares in Areeba, a perpetual injunction restraining Areeba from removing him as a director, as well as an order for the parties to go into account to determine the amount of dividends due him on his shares.

Mr Hesse again filed a motion for an interlocutory injunction to restrain Areeba from convening an extraordinary meeting to remove him as director of Areeba, pending the determination of the suit but it was dismissed by the court.

Moving the motion to set aside the court’s decision, Investcom held that "having regards to the plaintiff’s claims and the nature of Areeba’s defence which substantially covers Investcom, the court ought not to have ordered judgement in default of a defence against Investcom.

"The reason why Investcom has not filed its defence is that it would prejudice its case and also amount to taking a fresh step in the action having regard to the fact that Investcom is seeking to enforce an arbitration agreement between the parties," it argued.

Responding, Mr. Hesse said the application by Investcom was "frivolous and vexatious," adding "it did not disclose sufficient reason why the court should exercise its discretion in favour of Investcom as far as the setting aside of the interlocutory judgement in default of a defence was concerned."

He said some of the depositions in Investcom’s application showed that the defendant had no intention of filing its statement of defence either now or soon for the case to proceed, and added that "some of its depositions are intended to intimidate, scandalise and to bring this court and its proceedings into disrepute."

Dismissing the application, the court said no new issue was raised in the application by Investcom to set aside the order, adding "on the contrary the argument reiterated for Investcom sustains the basis on which judgement was entered.

"If a defendant whose application for stay of proceedings pending arbitration is refused chooses not to file pleadings in flagrant disregard of that ruling and instead elects to commence the arbitrati on proceedings, then the court does not see how that defendant now faced with a predicament of its own making can come before the same court to seek what will be tantamount to a validation of its action and its failure to comply with the rules".