By William Yaw Owusu
Saturday May 2, 2007
The Commercial Court in Accra,on Thursday refused an application for stay of proceedings pending an arbitration in the United Kingdom 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 application was filed by Investcom Consortium Holdings S.A. of Beirut, Lebanon, majority shareholders in Areeba in substantive suit in which Mr. Aggrey, has sued Investcom, Areeba as well as Grandview Management of Texas, United States to claim his shares.
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 on April 30.
Mr. Felix Ntrakwah, counsel for Investcom then moved the application for stay of proceedings pending arbitration saying “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 had 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 that “until the court declares whether the plaintiff is a shareholder he cannot assert his rights under the shareholders agreement”.
Refusing the application, Justice Henry Kwofie said what Investcom sought to do was against the High Court Civil Procedure Rules which frowns on unecessary expenses,delays among others.
He said if the application is granted it will result in an identical proceedings in two fora adding "we will have a situation where while this case proceeds the arbitration process will be going on".
Justice Kwofie explained that although Areeba and Grandview are not part of the shareholders' agreement the reliefs sought by Mr. Aggrey "are inter-related because they have been sued jointly and severally and the grant of a stay of proceedings will affect the two".
The court said "Even if the stay is granted, the substantive case will still be heard in Ghana" and added "arbitration is a private dispute resolution process.It does not bind persons or people who are not parties to it".
After the judge had completed his ruling Mr.Thaddeus Sory counsel for Grandview wanted to move his application to restrain Investcom and Mr.Aggrey from going for the arbitration but the judge said "i thought this ruling has a bearing on your application".
The case was subsequently adjourned to June 21.
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