PT Ventures SGPS SA v Vidatel Ltd

• Jurisdiction: British Virgin Islands
• Judge: Jack, J
• Judgment Date: 16 March 2020
• Judgment citation (vLex): [2020] ECSC J0316-1
• Court: High Court (British Virgin Islands)
• Docket Number: CLAIM NO. BVIHC (COM) 2015/0117
• Date: 16 March 2020

[2020] ECSC J0316-1

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(COMMERCIAL DIVISION)

CLAIM NO. BVIHC (COM) 2015/0117

CLAIM NO. BVIHC (COM) 2019/0067

Between:

PT Ventures SGPS SA

Claimant

and

Vidatel Ltd

Defendant

Appearances:

Mr. Roger Masefield QC, with him Mr. David Welford and Ms. Akesha Adonis of Maples and Calder for the claimant

Mr. Jonathan Adkin QC, with him Ms. Tamara Cameron and Ms. Yegâne Güley of Walkers for the defendant

1 Jack, J[Ag.]: This application concerns the enforcement of an arbitration award for US$646,445,968.

2 Unitel SARL (“Unitel”) is the main mobile telephone operator in Angola. On 20 ^th February 2019, an arbitration tribunal sitting in Paris made a final award ordering that the defendant (“Vidatel”) pay the claimant (“PTV”) the sum of US$339,400,000 in respect of the diminution in value of PTV's shares in Unitel and US$314,865,512 in respect of unpaid dividends from Unitel. After discovery of a mathematical error, by an addendum made 30 ^th April 2019 the tribunal reduced the latter figure to US$307,045,968.

3 The current proceedings, action BVIHC ( COM) 2019/0067 (“the recognition action”), were commenced on 16 ^th May 2019 by, what at any rate purports to be, a fixed date claim form. PTV sought leave to enforce the arbitral award (as varied) pursuant to sections 81 and 84 of the Arbitration Act 2013, 1 which gives force of law to the New York Convention.2

4 What is now before me is an application by PTV filed on 2 ^nd August 2019 seeking summary judgment in its favour in respect of enforcement of this final award (as varied by the addendum). PTV sought in the alternative a stay of the enforcement proceedings on terms that Vidatel provide security in a sum subsequently put at US$200 million. There were also two cross-applications by the parties which I resolved orally at the conclusion of the argument before me.

5 The tribunal in its February award also made consequential orders for interest and costs. In para VI of the operative part of its award, the tribunal made provision for the offsetting of monies received under the award against dividends otherwise payable by Unitel. I shall revert to the terms of para VI in due course.

Procedural matters

6 As long ago as 9 ^th October 2015, in action BVIHC ( COM) 2015/0117, Leon J granted PTV a worldwide freezing order against Vidatel. The freezing order has subsequently been extended and varied. PTV complain that Vidatel has not fully complied with the order. An application that Vidatel be found to be in contempt failed in 2016 before Leon J, although he was critical of Vidatel's compliance with its disclosure obligations.3 Subsequently in 2019, Adderley J 4 found on balance of probabilities that Vidatel had broken the terms of the freezing order. (For reasons

relating to an issue of self-incrimination, those proceedings before him were not for contempt.)

7 On 10 ^th June 2019, shortly after PTV issued its recognition action, Vidatel applied in France to annul the arbitration award. Under French law, applications to annul awards made by an arbitral tribunal sitting in Paris go directly to the Cour d'Appel de Paris. From this appeal court, there is a further right of appeal on a point of law to the Cour de Cassation, the highest civil court in France. It is common ground that the application to annul was brought within the time limits permitted by French law for the bringing of such an application.

8 Vidatel take two points in the French proceedings. Firstly, they say that the arbitral tribunal was not properly constituted, so that its award is a nullity. Secondly, they say that two of the arbitrators, Marcelo Roberto Ferro (“Mr. Ferro”) and Klaus Sachs (“Prof. Dr. Sachs”), were not independent. These I shall describe as the “Paris defences”.

9 The Cour d'Appel will hear oral argument in the case in December of this year. A judgment can be expected in the early part of next year. An appeal to the Cour de Cassation is, in the light of the sums at stake, almost inevitable and will take about a further year. A final decision is only likely to be obtained in France in 2022.

10 The proceedings in this Court came before me for a first case management hearing on 20 ^th June 2019. I directed that Vidatel's brief to the Paris court should stand (in English translation) as its defence to the recognition action in respect of the Paris defences and that PTV's reply in the Paris proceedings was to stand as its reply to the Paris defences. I directed that Vidatel should file a supplemental defence to the recognition action dealing solely with any additional issues specifically concerned with BVI law (“the BVI defences”) with similar provision for PTV to file its reply thereto.

11 Pursuant to those directions, Ms. Michelle Duncan swore a second affidavit which stands as Vidatel's defence in respect of the BVI defences. Mr. John Rogerson had sworn the first affidavit in support of the recognition action (which stands as the statement of claim in the recognition action). He swore a third affidavit which stands as PTV's reply to the BVI defences.

12 Vidatel's BVI defences are three. First, the final award is said to have infringed the doctrine of separate corporate personality in that Vidatel is made liable for the wrongful acts of Unitel. Second, Vidatel did not have a proper opportunity to present its case to the tribunal on the valuation of PTV's Unitel shares. Third, the final award leads to double recovery, because PTV would have not just the dividends paid by way of damages from Vidatel, but also the increased capital value of Unitel.

The facts

13 The shares in Unitel are and were held, one quarter each, by PTV, a Portuguese company; Vidatel, a BVI company; Geni SARL (“Geni”), an Angolan company, owned by a retired Angolan general; and Mercury Serviçios de Telecomunicações SARL (“Mercury”), another Angolan company. Mercury is a wholly-owned subsidiary of Sonangol, Angola's state-owned oil and gas company. Sonangol has recently acquired majority ownership of PTV from a Brazilian company, Oi SA (“Oi”). Vidatel is owned by Ms. Isabel dos Santos. She is the daughter of a former president of Angola and is reputed to be the richest woman in Africa. More recently she appears to have fallen out with the Angolan state. On 23 ^rd December 2019, an Angolan court granted an order of saisie conservatoire against her, including purportedly her beneficial ownership of Vidatel's shares in Unitel.

14 The four shareholders held their shares pursuant to a shareholders' agreement with an effective date of 15 ^th December 2000. (PTV was then called Portugal Telecom International SGPS SA.) The agreement is in English and largely follows an English common-law style of drafting. The substantive rights given by the agreement I shall discuss in relation to the arbitration award. Of importance for the current application is the arbitration clause, clause 16. This follows clause 14, which is an “entire agreement” provision, and clause 15, which provides for the shareholders' agreement to be governed by Angolan law. Clause 16 reads:

“16.1 Any claim, dispute or other matter in question between the Parties with respect to or arising under this Agreement or the breach thereof, shall be decided by arbitration, by a panel of five [5] arbitrators, one to be designated by each Party, and the fifth one to be designated by the other four arbitrators, provided, however, that if no agreement between the arbitrators designated by the Parties is reached, the independent arbitrator shall be designated by the President for the time being of the International Chamber of Commerce. Such arbitration shall be in accordance with Rules of the International Chamber of Commerce. Any such arbitration shall be conducted in English in Paris.

16.2 The independent arbitrator shall have a casting vote.”

I do not need to set out clause 16.3.

15 Unitel commenced operations in April 2001 and grew to be the biggest mobile telephone company in Angola. Unitel declared a dividend every year (although the 2010 declaration was by way of a special dividend). These were paid to Mercury and Geni in Kwanza, the local Angolan currency, which is not freely convertible. However, PTV and Vidatel were entitled to payment in hard currency. There were delays in paying the hard currency dividends from the time of the 2010 special dividend. Between November 2012 and the date of the final award, PTV did not receive any dividend payment at all. (It refused to accept payment in Kwanza.) Although there were difficulties between the parties in 2006, matters started to become more tense in 2010. In 2014 relations between the parties broke down completely, when the other shareholders refused to vote on to Unitel's board the director nominated by PTV. PTV complains that the other shareholders, in breach of the shareholders' agreement, (mis)used their control of the board to prevent Unitel paying dividends to PTV.

16 On 13 ^th October 2015, PTV filed a request for arbitration with the International Chamber of Commerce (“the ICC”). In the request PTV submitted that, if the arbitration tribunal was composed as required by clause 16, namely with PTV, Vidatel, Mercury and Geni each nominating one arbitrator, this would breach the requirement of “ égalité”, a mandatory rule of French arbitration law, because it would effectively mean one arbitrator against three, with the president unable to use a casting vote. It invited the ICC to appoint all the arbitrators. If the ICC was against it on the question of égalité, then PTV nominated Mr. Laurent Lévy as its arbitrator.

17 In its response to the ICC, Vidatel objected to any departure from the clause 16 procedure for appointing arbitrators. Vidatel nominated Dr. Matthieu de Boisséson as its arbitrator. Mercury and Geni supported Vidatel's position on the constitution of the tribunal and nominated Dr....