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28.05.2007 General News

US Court wants legal battle over energy job stopped

The feud between two US-based companies, General Electric (GE) Energy Rentals Incorporated and Lushann International Energy Incorporated over the 2002 energy contract with the Volta River Authonty (VRA) has taken a new turn.

This follows an order granted one of the parties, General Electric Energy Rentals, in a US court restraining Lushann's Chief Executive Officer (CEO) from going ahead with the case in Ghana.

The case, which was due for hearing at the Accra High Court today, has become even more complex because Lushann and a co-defendant are contending the alleged acquisition of GE Rentals by Aggreko Plc, a company based in Atlanta.

The Texan court order, which was given earlier this month, barred Lushann's CEO, Mr Quincy Sintim Aboagye, and his counsel, Mr James Okorafor, from travelling outside the US. They are also "ordered not to participate in or encourage the prosecution of Lushann's claims against GE Rentals in Ghana".

It said until compliance with the order was achieved, the two were further ordered not to seek or obtain duplicates or replacement of passports and any other identifying information about them might be sent to the United States Department of State and any other persons or agencies to assist in the enforcement of the order.

"They may purge themselves of this civil contempt by dismissing Sintim Aboagye's pending claims in Ghana against GE Rentals and filing and serving the conclusive written evidence of such dismissal in this court, as required by the permanent injunction," the court ruled.

When the case came up for trial in Ghana, GE Rentals Incorporated argued that a court in Texas had dismissed a similar case which Lushann International instituted against it.

However, the Accra High Court reasoned that the matters raised by Lushann International should be the subject matter of the trial in Ghana.

Following the new development, a co-defendant in the Ghanaian case has also initiated contempt proceedings at the Accra High Court against GE Rentals Incorporated and 11 others described as directors who he said had taken over G.E. Rentals Incorporated.

In his affidavit in support of the motion (ex-parte) for committal for contempt, Mr Philip Dampare Adjepong said the case in Ghana was slated for hearing today and GE Rentals Incorporated, very mindful of the strategic role Mr Sintim Aboagye played in the subject matter of dispute, filed for contempt in a Texan court against him, with the sole aim of preventing him from testifying in the case.

He said GE Rentals Incorporated had been acquired by Aggreko Plc, with its headquarters in Glasgow, UK, and its American arm, Aggreko Plc in Atlanta but "the acquisition had not been brought to the attention of the Ghanaian court, by reason of the fact that every subterfuge could be put together to defeat the ends of justice in Ghana".

According to the applicant, all the nine other respondents were the directing minds of GE Rentals Incorporated and Aggreko Inc who had engineered the contempt application against Mr Sintim Aboagye, who was merely obeying and respecting the command of a court of competent jurisdiction.

He said deliberately intimidating a witness summoned by the court from attending to testify amounted to interfering with the administration of justice, which was contempt of court.

In the substantive matter, Lushann International is seeking a declaration that the conduct of GE Rentals amounted to a breach of contract.

On January 10, 2002, the management of the VRA entered into an agreement with Lushann for the lease of an 85 MW power plant for a three-year period to supplement the energy supply in the system.

In order to ensure efficiency in the execution of the project, Lushann International entered into an agreement with GE Rentals to jointly execute it.

However, according to the plaintiff the defendant used plaintiff's trade secrets and strategic information regarding its power purchase agreement (PPA) with the VRA without its consent.

It further contended that the defendant interfered with the plaintiff's contractual relationship with the VRA, which resulted in the termination of the PPA and misappropriated its trade secret.

It said on February 8, 2002, the plaintiff executed a PPA with the VRA for the emergency supply of power to Ghana, saying that after the execution of the PPA, the plaintiff, mindful of the time constraints, aggressively expended effort, time and resources towards its implementation.

These included negotiating and executing several agreements, making trips to Europe and Africa and within the US.

Lushann International said because of the estimated time of four to six months required to pour concrete for the installation of a permanent plant, the VRA and the plaintiff decided to resort to the temporary use of skid mounted units.

It said the plaintiff found out that the defendant had several of the skid mounted units in the US to rent out and so, with the assistance of the defendant's personnel, it conducted an inspection of the units.

Accordingly, the plaintiff and the defendant then commenced discussions and negotiations aimed at exploring ways and means of implementing the PPA with the VRA and sent the defendant a copy of the PPA, a copy of the letters of credit opened in plaintiff's favour by the VRA and the names of its primary contacts at the VRA.

It said during those discussions, the plaintiff revealed its trade secrets, confidential business information and the strategic plans for power generation in Ghana and the rest of West Africa, with assurances from the defendant that the information would be utilised only to further the plaintiff's relationship with the VRA.

It was also to enable the defendant to assess plaintiff's invitation to form a limited joint venture with the defendant for the purpose of supplying power to the West African sub-region.

As a result of those discussions and negotiations, the plaintiff and the defendant executed a memorandum of understanding (MoU) on or about March 20, 2002 in furtherance of the plaintiff's PPA with VRA.

It said without the plaintiff's consent, the defendant began to make contacts with the VRA in respect of the plaintiff's PPA and thereby complicated the plaintiff's relationship with the VRA and succeeded in wresting the PPA from it.

In its statement of defence, GE Rentals denied all the claims.

Source: Daily Graphic