Monday, March 9, 2015

Court dismisses injunction against digital TV migration

Court dismisses injunction against digital TV migrationGhana’s bid to migrate from analogue to digital terrestrial television (DTT), has been given a boost by the Commercial Court in Accra.
The court, on Monday morning, gave the Ministry of Communication the nod to begin processes to appoint a contractor to migrate Ghana from analogue to digital terrestrial television by June 2015.
It followed the dismissal of an order for interlocutory injunction against the project by a Chinese firm.
In a terse ruling, the court, presided over by Mr Justice George K. Koomson, said “the application for interlocutory injunction has been refused. Reasons to be given on March 16, 2015.”
Deputy Ministers of Communication and Justice, Mr Ato Sarpong and Dr Dominic Ayine, left the courtroom elated.
In an interview with journalists after the court’s decision, Mr Sarpong, said the ministry could now proceed to evaluate tenders documents from 17 companies.
He gave the assurance that Accra and Kumasi would migrate to DTT by June 17, 2015 while other parts of the country would be connected by December 2015.
According to him, some steps had been taken in the past to facilitate Ghana’s migration.
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The Court Case
Star Communication Network Technology Company Limited of China, sued the Ministry of Communications through the Attorney-General over the abrogation of an April 11, 2012 contract for the supply and installation of a reliable energy-efficient and cost-effective Digital Terrestrial Television (DTT) Network Solution.
The Ministry of Communication denied any wrongdoing and explained that it abrogated the contract after the plaintiff had made false representations, as well as failed to meet its part of a contractual arrangement to pre-finance the project and be reimbursed within a 10-year period.
An affidavit in opposition to the plaintiff’s motion for interlocutory injunction stated that the ministry acted within the confines of the law before abrogating the contract and for that reason, the plaintiff’s application must be dismissed.
In addition, the Ghana Independent Broadcasters Association (GIBA) joined forces with the Ministry of Communications and prayed the court not to entertain the suit because any delay in Ghana’s bid to migrate to DTT would have a negative impact on its members.

Case of plaintiff

According to a statement of claim accompanying the writ of summons, the plaintiff met all contractual obligations but the government delayed in working on the necessary documents to warrant the Exim Bank of China to release money for the financing of the project.
It said the MoC was also required to procure Cabinet and Parliamentary approvals for the concessional loan, the execution of the loan agreements as well as for the notification of the supplier of the award but it failed to fulfil the said conditions apart from the notification of the award.
According to the statement, the MoC wrote a letter dated November 17, 2014, intimating the ministry’s intention to disengage itself if the financing agreement – i.e. the concessional loan, was not received in the next 11 days, that was November 28, 2014.
It said as an assignee of the contract, all the plaintiff was required to do to assist the grant of the loan was to facilitate the process of accessing the concessional loan by using its best efforts, which it had done.
“It was the duty of the Ministry of Communications to process the said loan application on schedule and with full knowledge of its obligation that it obtained all approvals had failed in the discharge of those obligations.
“However, to the utter surprise of the plaintiff, by a letter dated January 14, 2015, the Minister of Communications again wrote to the plaintiff now terminating the agreement dated April 11, 2012, purporting to do so by virtue of Article 41.1 of the General Conditions of Contract contained therein which stated that the purchaser could terminate for its convenience,” it said.
It further averred that to further advance its agenda, the ministry on January 29, 2015 put up an advertisement in the Daily Graphic newspaper “advertising the project which plaintiff had been contracted to execute under the agreement dated April 11, 2015 and which was unlawfully terminated by the minister through no fault of the plaintiff and has by the said advertisement, evinced a clear intention to award the contract to another entity”.


The plaintiff is praying the court to declare that the purported termination of the contract was unlawful.
It is also asking for an order reversing the purported termination of the said agreement, as well as an order of perpetual injunction to restrain the ministry and its agents from interfering with the April 11, 2012 contract”.

Ministry’s position

In its affidavit in opposition, the defendant averred that aside the plaintiff’s obligation to fully fund the project it also informed the defendant “it was capable of assisting the government to obtain a concessionary loan facility from the China Exim Bank, based upon which the contract was awarded StarTimes Ghana after all due processes have been followed”.
“The main reason why the contract was awarded to StarTimes Ghana was because of its proposal to the MoC indicating its capacity to facilitate the necessary funding for the project through concessionary loan arrangement from the China Exim Bank,” the affidavit in opposition noted.
It further explained that because StarTimes Ghana was a local entity and could not access the concessionary loan for the project, the Ministry of Finance was not in a position to submit any formal application to China Exim Bank for a concessionary facility in respect of an agreement entered into with a locally registered entity.
The affidavit said thus StartTimes Ghana within three months assigned its rights to Star Communications Network Technology Company Limited (now plaintiff in the case) and following from that the Ministry of Finance carried out the necessary due diligence and formally submitted the application for the concessionary loan on December 21, 2012.
It said the response from the China Exim Bank to the Ministry of Finance’s application “came by way of a letter dated January 27, 2014, months after the ministry had dispatched the application for the concessionary loan to the China Exim Bank”.

Back and forth

It said the ministry received another letter dated June 25, 2014 from the China Exim Bank seeking further clarifications on Ghana’s application, adding that “contrary to our understanding and the basis for StarTimes Ghana winning the contract, it became evident that a lot of information and documentation was required and the Ministry of Finance had to follow its usual process to compile, verify and ensure their accuracy before submitting same to the China Exim Bank”.
The affidavit averred that after formal trips to China, back and forth correspondence and due diligence carried out by the defendant, it became abundantly clear that the plaintiff was not in a position to pre-finance the project.
It said it also became clear the plaintiff had made false representations with regard to its claim that it had procured letters of intent from the China Exim Bank.

GIBA’s Position

Meanwhile, the Ghana Independent Broadcasters Association (GIBA) has filed an affidavit in opposition to the motion for interlocutory injunction asking the court not to allow the plaintiff “to fetter the progress of the digital migration programme since in any case the court is allowed to grant them damages for the worth of their work pursuant to the cancellation of the contract”.
“That as the beneficiaries of the contract, we have reviewed same and concluded that the contact did not contain any clause restricting the defendant from terminating the contract but rather a clause that states that the defendant could terminate the contract at any time for any reason,” an affidavit in opposition sworn on behalf of GIBA by its President, Mr Akwasi Agyeman, pointed out.
The affidavit in opposition said the entire membership of GIBA and the media industry in Ghana would suffer untold hardship should the project be further stalled.
According to the affidavit in opposition, Ghana was required to migrate to DTT by June 2015 per the international agreements binding the players in the industry.

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