Investcom Ordered To Halt Arbitration In London

By William Yaw Owusu

Friday, 07 December 2007
THE Commercial Court in Accra, yesterday restrained Investcom Consortium from continuing with an arbitration in London, U.K, in a case in which Richmond Aggrey, a Ghanaian businessman, has sued the company and is claiming 20 per cent shares in Scancom Limited, operators of Areeba mobile phone service, now MTN.

The court, presided over by Justice Henry Kwofie, also awarded ¢8 million cost against Investcom Consortium Holdings S.A of Beirut, Lebanon who are the majority shareholders of Scancom Ghana Limited.

Investcom Consortium commenced arbitration proceedings in London despite decisions by both the trial court and the Court of Appeal that they will not stay proceedings pending that arbitration.

Under the circumstance, Mr. Yonnei Kulendi, counsel for Mr. Aggrey, moved a motion on notice for interlocutory injunction to restrain Investcom from proceeding with the arbitration.

Besides Investcom, Mr. Aggrey, former Vice Chairman of Scancom, is also suing the telecommunication giant and Grandview Management of Texas, United States, to claim his shares.

Moving the motion on November 15, Mr. Kulendi described Investcom’s move as "unimaginable" harassment, saying "the effort by Investcom to proceed with the arbitration outside the country when the case is still being determined by a Ghanaian court, is to close the plaintiff’s right to natural justice.

"We want an unambiguous and express order to restrain them since the court has the legal authority to protect the sanctity of the proceedings. We will suffer irreparable damage if the order is not granted," he argued.

Responding, Mr. Felix Ntirakwah, counsel for Investcom, said: "the company had not abandoned its right to have the matter determined, adding, ‘We are only exercising our right to arbitration under the shareholders’ agreement."

He said Investcom did not need the "leave" of the court before proceeding to arbitration and that should not be interpreted by the plaintiff to mean a disrespect to the court.

Mr. Thaddeus Sory, counsel for Grandview, arguing on points of law, had opposed his co-defendant’s position to go on with the arbitration process, saying "it is better if the arbitration proceedings is stopped for this trial to proceed".

He said a careful study of the shareholders’ agreement indicates that the arbitration rights claim by Investcom is not automatic. "We should not allow proceedings in the arbitration to overtake the proceedings of this court."

In his ruling yesterday, Justice Kwofie described as in correct, Investcom’s stance that the court’s refusal to stay proceedings pending arbitration on May 31, left the parties to their fate, saying that any action outside that of the court would result in identical and multiplicity of proceedings.

The court said that taking into consideration the balance of convenience, it is proper for Investcom to cease with the arbitration proceedings and allow the case to take its natural course.

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 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, Scancom on July 24, filed an application to strike out Mr. Aggrey’s action "in part or whole" on the grounds that he failed to adhere to procedure 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 Scancom to file its defence within 14 days.

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

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