Resolve DTT dispute or face arbitration in London— StarTimes
Star Communication Network Technology Company Limited of China, also known as Startimes, has threatened to initiate arbitration proceedings at the London Court of Arbitration if Ghana does not take steps to resolve a dispute over the award of a contract for the migration from analogue to digital terrestrial television (DTT).
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The company had, earlier this year, taken legal action at the Commercial Court in Accra against the Ministry of Communications over the abrogation of a contract awarded it to migrate Ghana from analogue to DTT.
But it is now considering international arbitration.
Consequently, a letter dated June 4, 2015 and addressed to the Attorney-General has given the government 30 days to take steps to prevent the company from resorting to arbitration.
Per the company’s ultimatum, Ghana has up to July 4, 2015 to adhere to the call or prepare to be served with arbitration processes.
The letter, dated June 4, 2015 and signed by Mr John Shi, a partner of Star Communication Network Technology Company Limited of China, said, “Our client sincerely hopes that parties may be able to resolve the issues without recourse to formal arbitration proceedings.”
A press release dated June 22, 2015 and signed by the acting General Manager of StarTimes Accra, Mr Nelson Boateng, noted with concern media reports that the government had awarded an $82-million contract to another company, in spite of the ensuing legal battle.
“If these news reports attributed to the Deputy Minister of Communications, Mr Ato Sarpong, are true, then it will be a serious breach of contract and our lawyers will respond appropriately,” it said.
Court case
Meanwhile, Ghana’s bid to migrate from analogue to DTT received a boost on March 9 when the Commercial Court in Accra gave the Ministry of Communications the nod to begin processes to appoint a contractor to migrate Ghana from analogue to DTT.
That followed the dismissal of an order for interlocutory injunction against the project filed by StarTimes.
The Presiding Judge, Mr Justice George K. Koomson, said Ghana would suffer irreparable loss if the court stalled the digital migration process.
It, therefore, gave the government the green light to continue the process of awarding the contract for the digital migration.
Suit
Star Communication, earlier this year, 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 DTT network solution.
But the Ministry of Communications has 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 should not be countenanced.
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 ministry was also required to procure Cabinet and parliamentary approval 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 ministry wrote a letter dated November 17, 2014, intimating its intention to disengage itself if the financing agreement – that is, 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 further averred that to further advance its agenda, the ministry, on January 29, 2015, put up an advertisement in the Daily Graphic “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’s and has by the said advertisement evinced a clear intention to award the contract to another entity”.
Ministry’s position
In its affidavit in opposition, the defendant averred that aside from the plaintiff’s obligation to fully fund the project, it also informed the defendant that “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 had been followed”.
It said StarTimes Ghana, within three months, assigned its rights to Star Communications (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 that the plaintiff had made false representations with regard to its claim that it had procured letters of intent from the China Exim Bank.
The matter is still pending at the Commercial Court.
Star Communication Network Technology Company Limited of China, also known as Startimes, has threatened to initiate arbitration proceedings at the London Court of Arbitration if Ghana does not take steps to resolve a dispute over the award of a contract for the migration from analogue to digital terrestrial television (DTT).
The company had, earlier this year, taken legal action at the Commercial Court in Accra against the Ministry of Communications over the abrogation of a contract awarded it to migrate Ghana from analogue to DTT.
But it is now considering international arbitration.
Consequently, a letter dated June 4, 2015 and addressed to the Attorney-General has given the government 30 days to take steps to prevent the company from resorting to arbitration.
Per the company’s ultimatum, Ghana has up to July 4, 2015 to adhere to the call or prepare to be served with arbitration processes.
The letter, dated June 4, 2015 and signed by Mr John Shi, a partner of Star Communication Network Technology Company Limited of China, said, “Our client sincerely hopes that parties may be able to resolve the issues without recourse to formal arbitration proceedings.”
A press release dated June 22, 2015 and signed by the acting General Manager of StarTimes Accra, Mr Nelson Boateng, noted with concern media reports that the government had awarded an $82-million contract to another company, in spite of the ensuing legal battle.
“If these news reports attributed to the Deputy Minister of Communications, Mr Ato Sarpong, are true, then it will be a serious breach of contract and our lawyers will respond appropriately,” it said.
Court case
Meanwhile, Ghana’s bid to migrate from analogue to DTT received a boost on March 9 when the Commercial Court in Accra gave the Ministry of Communications the nod to begin processes to appoint a contractor to migrate Ghana from analogue to DTT.
That followed the dismissal of an order for interlocutory injunction against the project filed by StarTimes.
The Presiding Judge, Mr Justice George K. Koomson, said Ghana would suffer irreparable loss if the court stalled the digital migration process.
It, therefore, gave the government the green light to continue the process of awarding the contract for the digital migration.
Suit
Star Communication, earlier this year, 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 DTT network solution.
But the Ministry of Communications has 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.
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 ministry was also required to procure Cabinet and parliamentary approval 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 ministry wrote a letter dated November 17, 2014, intimating its intention to disengage itself if the financing agreement – that is, 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 further averred that to further advance its agenda, the ministry, on January 29, 2015, put up an advertisement in the Daily Graphic “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’s and has by the said advertisement evinced a clear intention to award the contract to another entity”.
Ministry’s position
In its affidavit in opposition, the defendant averred that aside from the plaintiff’s obligation to fully fund the project, it also informed the defendant that “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 had been followed”.
It said StarTimes Ghana, within three months, assigned its rights to Star Communications (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 that the plaintiff had made false representations with regard to its claim that it had procured letters of intent from the China Exim Bank.
The matter is still pending at the Commercial Court.
Writer’s email: [email protected].
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