DAVID TRUMPS AREEBA'S 'GOLIATH '

Telecoms

David Andreas Hesse won his last battle in the Ghanaian courts over his claim that his original 6% shareholding stake in Scancom was wrongfully diluted to 2% by an allegedly illegal capital call issued by Scancom in 1999.

Lawyers representing Investcom Consortium and Scancom Ltd, the telecoms Goliaths, last week surrendered in a legal battle with David Andreas Hesse, the small unsung Company lawyer/director since the formation of the company, and opted for arbitration before the London Court of International Arbitration, but found themselves cut down yesterday, in a landmark ruling before an Accra commercial court with cost of GH¢6 million.

A sparsely-filled court room heard the judge throw out the nth application for stay of proceedings pending arbitration and award cost of GH¢3 million against both defendants and ordered the companies to open their defence for the substantial case next Friday.

With a barely audible voice, Avid Andreas Hesse, represented himself with no lawyer by his side, and proceeded to literally floor the two senior lawyers representing Investcom and Scancom respectively, leaving Benson Nutsukpui of Areeba to make a spirited appeal to reduce the GH¢5 million cost initially awarded him to GH¢3m.

Ruling on the application to stay proceedings pending arbitration, the court, presided over by Justice Mrs. Cecilia H. Sowah indicated that looking at the countries chosen for arbitration, the question is whether the United Kingdom (London) is a country declared by the President of Ghana to be a reciprocating country party to the UN convention, and if not whether an application which proposes London as the forum for arbitration can be granted when the applicable law is Ghanaian Law.

Continuing, the judge referred to David's contention that Investcom has admitted that the arbitration agreement which it seeks to rely on is a foreign one but they failed to show that the UK is a party to the convention or that that convention is recognised by our laws.

Referring to relevant parts of Act 38 (Part 111 sect.36-41), the judge said that the application even under foreign awards as defined in 36(1) falls under a foreign award to be made in a reciprocating state. Then with a cool steady voice, she delivered the coup de grace, ending the multi-billion dollar company's application.

'L1 261 lists the countries recognised by the President of this country to be parties to the UN convention. The UK is NOT recognised as the Law stands now. In effect, an arbitral award obtained in the UK cannot be enforced in Ghana as L1 261 has not been amended to include all current parties to the convention. 1st defendant has therefore failed to bring itself within the ambit of the law'. Turning to David's part, the trial judge averred that the plaintiff, David Andreas Hesse has more than discharged the obligations for the matter to be heard in London.

The trial judge further dismissed the application in limine after she noted that the application to stay proceedings ought to be made by one who is a party to the arbitration and Scancom Ltd., providers of Areeba network services are not a party to the Shareholders Agreement and has no locus in filing an application for stay.

The bone of contention against the multi-billion dollar telecommunication company and Investcom Consortium Holding S.A. arises from a claim made by Mr. David Andreas Hesse that he is entitled to restoration of a 6% shareholding stake in Scancom as well as restoration of interest in Scancom he holds by virtue of his ownership stake in Scan Construction Limited ("Scan Construction"), another former Scancom shareholder.

The internationally renowned lawyer is contending that his original 6% shareholding stake in Scancom was wrongfully diluted to 2% by an allegedly illegal capital call issued by Scancom in 1999 and is seeking for a court order to reverse it.

The court which initially awarded a ¢5million cost had to reverse to ¢3million each against both defendants, after counsel for Scancom prayed the court that the cost was excessive.

David Hesse is also seeking an order restoring to him, his 6% shares in Scancom or in the alternative an order directed at the multibillion dollar telecommunication company to purchase his 6% shares in the company after a valuation of the company by an independent auditor.

Seeking further, he wants an order of perpetual injunction restraining Scancom Ltd., acting by itself, or its shareholders and officers from removing him as a director of the company in breach of the Shareholders Agreement and the law.

Other reliefs he is seeking include an order restoring the 3.4% shares of Scan Construction limited in Scancom or in the alternative an order that 914,600 of the ordinary shares of the company representing his 25% interest in Scan Construction Limited be restored to him.

Further, Hesse, is seeking an order that the parties go into account to determine the amount of dividends due to him on his shares and an order directed at the defendants to pay such amounts to him and other orders the court deems fit.

It was in respect of these claims that Scancom Ltd. filed an application seeking that the court stay proceedings pending the determination of arbitration as the court has power by law to stay proceedings and refer the parties to court arbitration as the agreed means of dispute resolution in the case.

According to Scancom, in the affidavit in support of their application, the plaintiff became a shareholder of the company by virtue of a Shareholders Agreement dated January 12 1996, as amended on 18-19 June 1996.

"By Clause 13(5) of the Shareholders Agreement, the parties thereto, including the plaintiff herein have agreed to resolve all disputes arising from the agreement by arbitration in London," the application read.

Ghanaian Chronicle