E-Talk Limited sues Milicom Ghana

A telecommunication product distribution company has commenced an action at the Commercial Division of the Accra High Court against Millicom Ghana Limited, claiming general damages of more than $23 million for breach of contract.

The plaintiff, E-Talk Limited, is also claiming special damages of $6,633,000 from the defendant, being revenue in the form of commissions that the plaintiff lost as a result of the illegal termination of an agreement between the two parties.

Millicom operates the telecommunication network under the trade name tiGO.

The plaintiff is further claiming GH¢64,551.08 being damages for trade debts it incurred to third parties as a result of the defendant's breach of the agreement.

In its statement of claim, the plaintiff said by an agreement dated July 18, 2006, Millicom appointed E-Talk as its dealer and sales representative to sell the products of the defendant and to operate the E-pin system for the defendant for a specified and definite three-year period commencing in August, 2006 and ending in August, 2009, unless otherwise terminated lawfully according to the provisions of the agreement.

According to the statement, it was part of the agreement that the plaintiff must have an office situated at an accessible location with dedicated staff to promote the defendant's products (i.e. the buying and selling of e-pin).

If said in terms of the agreement, the plaintiff was obligated, among other things, to ensure that it had adequate stocks of the e-pin product at all times, maintain its business premises to the standard acceptable to the defendant and comply with general instructions issued by the defendant from time to time.

It said the defendant was also obligated under the agreement to, among other things, provide support and incentives to the plaintiff and in particular, subject to technical feasibility, to lock all e-pin SIMs sold by (the Plaintiff) to (the Plaintiff's) controlled master e-pin SIMs in order to ensure “continuity”.

The statement said in order to discharge its obligations under the agreement, plaintiff invested substantially in personnel, equipment and infrastructure in the legitimate expectation that such investment would yield optimal returns in the course of its relationship with the defendant.

It said pursuant to the agreement, plaintiff developed and marketed the e-pin system successfully and by October, 2007 the plaintiff's total purchases of airtime from the defendant was in excess of US$16,000,000.00.

The statement said that by the said date of October, 2007 it had added a total of 201,561 subscribers to the defendant's network.

It said within 10 months of its operations, the plaintiff distributed 25,000, e-pin retail SIMs equivalent to 25,000 retail points.

According to the statement, plaintiff's successful development, marketing and distribution of the e-pin system resulted in significant financial gain to the defendant.

It said by a letter dated 28 September, 2007 and signed by its Chief Operating Officer, the defendant, in flagrant breach of the agreement, terminated the agreement by giving one month's notice.

The statement said the defendant used its stronger position to purposely and flagrantly breach the agreement with scant regard to the effect of such an action on the financial fortunes of the plaintiff, having calculated that it stood to gain far in excess of damages that may be awarded to the plaintiff; by force-snatching the plaintiff's business interests and legitimate expectations under the agreement.