Ghana International Airline crisis escalates

THUGGERY AT GIA SPARKS INT'L COURT ACTION
...Mpiani induced thuggery cited as
...American group repeats warning to Gloria Akufo

After several unsuccessful efforts to settle its dispute with the government of Ghana over Ghana International Airlines (GIA), GIA-USA LLC has finally taken the matter to the International Court of Arbitration in The Hague, The Netherlands.

GIA-USA took this decision after its settlement overtures had gone unanswered and ignored by the government for a long time. GIA-USA LLC said the resort to an international tribunal was the only option left.

Within the week, Ms. Gloria Akuffo, was given a hand-delivered letter from one R. Kirk Heaton, an appointed Chief Negotiator of GIA-USA LLC the managing partner in the troubled Ghana International Airline business – in which Government is holding 70 percent on behalf of the people of Ghana – reminding the Minister in Charge of Aviation that they had virtually run out of patience and were headed for The Hague to pursue international arbitration.

The letter, a copy of which the paper has seen has seen, complained that GIA’s alleged management had been stonewalling them and delaying a conclusive legally proper and acceptable resolution of the matter.

Heaton stated that the essence of GIA-USA LLC’s claim in arbitration is that on April 7, 2006, the Republic of Ghana, using security forces, forcibly removed the senior management of Ghana International Airlines Limited (GIAL) from their offices and purportedly terminated their appointments from the management of GIAL.

The Government of Ghana then assumed control of the airline offices, again with the force of arms, preventing the return of GIA-USA, LLC's appointed management, and has allegedly appointed a new Chief Executive Officer and other officers and is now running the day-to-day operations of the airline.’

It would be recalled that the Chief of Staff, Mr. Kwadwo Mpiani, mobilised armed Policemen to the offices of GIA, drawing mass negative local and international publicity and condemnation – an issue that undermined the authority of the Vice President, Alhaji Aliu Mahama, who was then acting President at the time Mr. Mpiani and his ‘boys’ overruled his efforts to stop the thuggery.

The letter directly charged that those acts were taken at the direction of the President's Chief of Staff and that the actions were taken in direct violation of the laws of Ghana, the corporate regulations of GIAL and the contractual agreements signed between the shareholders of GIAL.

Now GIA-USA LLC, in its capacity as a shareholder, is demanding that the Republic of Ghana immediately provide Mr. Sammy Crabbe, the representative of GIA-USA LLC in Ghana, with copies of the financial statements for GIAL since April 2006.

GIA-USA LLC is demanding also that pursuant to the provisions of the Shareholders' Agreement, government designate an arbitrator for the upcoming international arbitration.

Mr. Heaton remarked that the "rule of law" was ignored and the Republic of Ghana expropriated the valuable asset created by GIA-USA LLC. He said these actions were taken just as GIA-USA LLC had concluded final negotiations and definitive documents for a favorable investment in GIAL by Ethiopian Airlines (ET) of $12,000,000.

The central issue in the dispute is the Government of Ghana's unilateral abrogation of the Shareholders' Agreement between the Government of Ghana and GIA-USA LLC and enforcing the Government of Ghana's will with physical force and the power of the sovereign.

It is argued that the situation disregarded the rule of law, sanctity of contractual relationships and the importance of private property rights, which has had scary effect on foreign investment in Ghana, and sometimes local ones.

GIA-USA LLC invested $2.1 million into GIAL for a minority stake on the condition that the Government of Ghana would not control the airline notwithstanding its shareholding percentage or capital investment.

Continuing, the managing partner complained that this investment criterion was violated by the Government of Ghana, and the Government of Ghana “continues to operate the airline in violation of its own laws and contractual obligations. GIA-USA LLC's employees and contractors further worked tirelessly for over a year to enhance the value of GIAL by starting an airline and locating financing to support the airline and other equity investors”.

Going down to basics, the LLC group noted that the value of the airline at the time they were booted out was in excess of $50,000,000 based on the willingness of the Ethiopians to invest $12,000,000 for 24% ownership of GIAL.

This value has now been destroyed by the illegal actions of the Government of Ghana.

Meanwhile, Mr. Sammy Crabbe in an interview with The Chronicle indicated that his outfit would foot the bill of government’s arbiter although it is expensive.

Mr. Crabbe said GIA-USA LLC is demanding an aggravated damage of $10.8 million and specific performance.

He intimated that the filing process at The Hague would be completed in the first week of November.

It would be recalled that the commercial court trying the case filed against the Attorney General (AG), Ghana International Airlines (GIA) and the Chief of Staff by GIA-USA stayed proceedings to enable parties to the suit go for mediation and arbitration according to the shareholders’ agreement.

But after the stipulated six months, the disagreement has not been resolved, thus paving way for GIA-USA to go to Hague.After several unsuccessful efforts to settle its dispute with the government of Ghana over Ghana International Airlines (GIA), GIA-USA LLC has finally taken the matter to the International Court of Arbitration in The Hague, The Netherlands.

GIA-USA took this decision after its settlement overtures had gone unanswered and ignored by the government for a long time. GIA-USA LLC said the resort to an international tribunal was the only option left.

Within the week, Ms. Gloria Akuffo, was given a hand-delivered letter from one R. Kirk Heaton, an appointed Chief Negotiator of GIA-USA LLC the managing partner in the troubled Ghana International Airline business – in which Government is holding 70 percent on behalf of the people of Ghana – reminding the Minister in Charge of Aviation that they had virtually run out of patience and were headed for The Hague to pursue international arbitration.

The letter, a copy of which the paper has seen has seen, complained that GIA’s alleged management had been stonewalling them and delaying a conclusive legally proper and acceptable resolution of the matter.

Heaton stated that the essence of GIA-USA LLC’s claim in arbitration is that on April 7, 2006, the Republic of Ghana, using security forces, forcibly removed the senior management of Ghana International Airlines Limited (GIAL) from their offices and purportedly terminated their appointments from the management of GIAL.

The Government of Ghana then assumed control of the airline offices, again with the force of arms, preventing the return of GIA-USA, LLC's appointed management, and has allegedly appointed a new Chief Executive Officer and other officers and is now running the day-to-day operations of the airline.’

It would be recalled that the Chief of Staff, Mr. Kwadwo Mpiani, mobilised armed Policemen to the offices of GIA, drawing mass negative local and international publicity and condemnation – an issue that undermined the authority of the Vice President, Alhaji Aliu Mahama, who was then acting President at the time Mr. Mpiani and his ‘boys’ overruled his efforts to stop the thuggery.

The letter directly charged that those acts were taken at the direction of the President's Chief of Staff and that the actions were taken in direct violation of the laws of Ghana, the corporate regulations of GIAL and the contractual agreements signed between the shareholders of GIAL.

Now GIA-USA LLC, in its capacity as a shareholder, is demanding that the Republic of Ghana immediately provide Mr. Sammy Crabbe, the representative of GIA-USA LLC in Ghana, with copies of the financial statements for GIAL since April 2006.

GIA-USA LLC is demanding also that pursuant to the provisions of the Shareholders' Agreement, government designate an arbitrator for the upcoming international arbitration.

Mr. Heaton remarked that the "rule of law" was ignored and the Republic of Ghana expropriated the valuable asset created by GIA-USA LLC. He said these actions were taken just as GIA-USA LLC had concluded final negotiations and definitive documents for a favorable investment in GIAL by Ethiopian Airlines (ET) of $12,000,000.

The central issue in the dispute is the Government of Ghana's unilateral abrogation of the Shareholders' Agreement between the Government of Ghana and GIA-USA LLC and enforcing the Government of Ghana's will with physical force and the power of the sovereign.

It is argued that the situation disregarded the rule of law, sanctity of contractual relationships and the importance of private property rights, which has had scary effect on foreign investment in Ghana, and sometimes local ones.

GIA-USA LLC invested $2.1 million into GIAL for a minority stake on the condition that the Government of Ghana would not control the airline notwithstanding its shareholding percentage or capital investment.

Continuing, the managing partner complained that this investment criterion was violated by the Government of Ghana, and the Government of Ghana “continues to operate the airline in violation of its own laws and contractual obligations. GIA-USA LLC's employees and contractors further worked tirelessly for over a year to enhance the value of GIAL by starting an airline and locating financing to support the airline and other equity investors”.

Going down to basics, the LLC group noted that the value of the airline at the time they were booted out was in excess of $50,000,000 based on the willingness of the Ethiopians to invest $12,000,000 for 24% ownership of GIAL.

This value has now been destroyed by the illegal actions of the Government of Ghana.

Meanwhile, Mr. Sammy Crabbe in an interview with The Chronicle indicated that his outfit would foot the bill of government’s arbiter although it is expensive.

Mr. Crabbe said GIA-USA LLC is demanding an aggravated damage of $10.8 million and specific performance.

He intimated that the filing process at The Hague would be completed in the first week of November.

It would be recalled that the commercial court trying the case filed against the Attorney General (AG), Ghana International Airlines (GIA) and the Chief of Staff by GIA-USA stayed proceedings to enable parties to the suit go for mediation and arbitration according to the shareholders’ agreement.

But after the stipulated six months, the disagreement has not been resolved, thus paving way for GIA-USA to go to Hague.