Court restrains Investcom

December 8, 2007 (Page 23)
Story: Mabel Aku Baneseh
THE Commercial Court in Accra on Thursday December 6, 2007 restrained Investment Consortium Holdings, SA (Investcom), the majority shareholders of MTN, from seeking arbitration in a matter brought against it and two others by a Ghanaian businessman.
Investcom was seeking arbitration in the London Court of Arbitration on a suit filed against it by Mr Richmond Aggrey and two others, namely, Scancom Ghana Limited, operators of MTN, and Grandview Management, Texas, but counsel for Mr Aggrey filed an application for interlocutory injunction restraining Investcom from further proceeding with the arbitration processes in London.
The court held that the issues in controversy before it were not issues that could be determined by arbitration, adding that the issues could be heard by a Ghanaian court of competent jurisdiction.
It accordingly upheld submissions by counsel for Mr Aggrey, Mr Yonni Kulendi, who said Mr Aggrey could not be called to go on arbitration, which was normally between shareholders, because, as it stood now, Investcom was challenging Mr Aggrey’s claim of 20 per cent shares in Scancom Ghana Limited.
Following the court’s ruling and the fact that none of the parties have filed a new application, a pre-trial conference between the parties would be held at the Commercial Court complex in Accra on December 13, 2007.
The new Commercial Court rules require that there should be a pre-trial conference to offer parties an opportunity to settle their differences within 30 days after parties had filed their pleadings, which they (parties) have so far done.
The pre-trial conference, which is normally heard in camera, will be presided over by another judge and if parties are not able to resolve the matter within the 30-day period, the matter would then go for trial.
On November 19, 2007, counsel for Mr Aggrey, Mr Yonni Kulendi, stated that the conduct of the applicant was improper because it was making all moves calculated at frustrating the court and Mr Aggrey from proceeding with the court action.
He said looking at the balance of convenience, obvious damage would be occasioned if the court did not take steps to stop the arbitration which was proceeding in earnest.
For his part, counsel for Investcom, Mr Felix Ntrakwah, said the plaintiff went to court, knowing very well that there was an arbitration clause in the shareholders’ agreement.
According to him, the application was brought when the arbitration had already commenced.
Counsel said the plaintiff had not demonstrated that the arbitration was void, adding that Investcom did not need to seek the leave of the court to arbitrate.
He said his client’s action was not an act of disrespect towards the court and explained that his client would lose substantially if the court granted the plaintiff’s application.
In November last year, Scancom Ghana Limited, operators of MTN, then Areeba, filed an appeal challenging the Commercial Court’s dismissal of its application to strike out Mr Aggrey’s suit.
The applicant had prayed the Court of Appeal to set aside the lower court’s ruling and accordingly strike out the plaintiff’s writ of summons for non-compliance with a section of the new High Court procedure rules but the Court of Appeal dismissed the application and accordingly upheld the Commercial Court’s decision.
Scancom filed another application praying the Commercial Court to stay proceedings in the substantive matter pending the outcome of the appeal but that application was also dismissed.
The Commercial Court in Accra on October 20, 2006 dismissed a motion filed by Scancom Ghana Limited which prayed the court to strike out a writ of summons filed by Mr Aggrey against Scancom and the two other defendants for non-compliance with the High Court rules.
The plaintiff sued Investcom, the majority shareholder in Scancom, and Grandview Management Limited when Scancom decided to engage in a merger deal with MTN Incorporated of South Africa.
The deal has, however, been concluded, following the transfer of all shares in Scancom to the South African company.
That was after a High Court order on July 14, 2006 which restrained Scancom and other respondents from "continuing, progressing and or concluding the merger with and/or acquisition of Investment Consortium Holdings by MTN Company of South Africa without taking into account and/or providing for the plaintiff's 20 per cent shares in Scancom Limited".
The closure of the acquisition, according to Mr Aggrey, would occasion the loss of his shareholding in the company by reason of the accrual of the rights of the MTN Group as a third party.
Mr Aggrey's contention was that his name had been removed from the shareholders’ list of Scancom without any explanation, adding that the particulars of the directors and shareholders of Scancom obtained from the Registrar General's Department, dated June 2, 2006, and signed by Mr K.A. Ohene-Obeng, a Chief State Attorney, for the Registrar of Companies, showed that Mr Aggrey's name was not included in the shareholders’ list.
It said the onus was on the company to explain how Mr Aggrey ceased to be a shareholder.
In his substantive writ, Mr Aggrey was claiming against the defendants, jointly and severally, an order directed to Scancom to pay him his true dividends declared from the 2000 to 2005 financial years.
He also sought the rectification of the membership of Scancom Ltd to include his name and restore him to his position as a shareholder and director of the company.