(a) this Answer is not intended as a definitive statement of Vidatel's position and Vidatel will wish to set out in subsequent memorials and/or submissions the detail of the factual and legal propositions on which it relies;
(b) moreover, the preparation of Vidatel's Answer has been substantially hindered by (i) the diversion of resources necessary to respond to a host of interim applications and parallel proceedings initiated by PTV against both Vidatel and other persons or entities connected to the transactions complained of in PTV's Request; (ii) the further distraction of PTV's legal challenges under French law to the constitution of the Tribunal; and (iii) the limited time which it has been afforded to prepare this Answer;
(c) in those circumstances, failure at this stage to address any specific allegation is under no circumstances to be taken as an admission with respect to that allegation; and
(d) except where this Answer makes explicit admissions, PTV is required to prove each and every fact upon which its claims depend.
(a) Vidatel uniformly denies all allegations of conspiracy, "looting" of Unitel and other similar and unfounded allegations of dishonesty or other material wrongdoing by Vidatel. Vidatel has at all times acted in good faith and in what it considered to be the best interests of Unitel. In this connection, the suggestion at paragraph 4 of PTV's Request that Geni and Mercury – which (as described at paragraph 7 of the Request) are entities distinct from Vidatel and Vidatel's owner, Isabel Dos Santos – have engaged in wrongful transactions at the expense of Unitel and hence at their own expense as 50% shareholders (in aggregate) of Unitel, merely to benefit Mrs Dos Santos personally, is entirely nonsensical.
(b) Moreover, the repeated attempts throughout the Request to impugn the integrity of Mrs Dos Santos (including through innuendo and tendentious descriptions such as the "billionaire daughter of Angola's President") are unacceptable, designed solely to prejudice the Tribunal's perception of Vidatel and have no proper place in this arbitration.
(c) Insofar as PTV claims to be unaware of transactions about which it now complains this appears to be the result of a lack of information-sharing in the wake of PTV's acquisition by the Brazilian telecoms company, Oi. Although Oi's lack of communication with PTV's former representatives within Unitel (principally Zeinal Bava and Luis Pacheco de Melo) is regrettable, it is not and cannot logically or legally be held to be something for which Vidatel is responsible, let alone the basis of a claim for damages.
(d) In any event, PTV's attempt in these arbitral proceedings betweenshareholders to challenge the validity and effectiveness of transactions entered into by Unitel (which is not – and could not be – a party to the Shareholders' Agreement or to this arbitration) is misconceived.
(e) Even if this arbitration were a proper forum to complain about such transactions - which for the reasons set out below is not the case - then PTV's quantification of its losses for nearly USD 2.5 billion is grossly exaggerated andon any view fanciful.
(a) PTV's claim has not been brought as a bona fide attempt to recover compensation for loss and damage which PTV has sustained as a result of any material wrongdoing by Vidatel. Rather, the claim is motivated by the desire of PTV and those controlling it (in particular, Oi, PTV's majority indirect shareholder) to: (i) exert commercial pressure upon Vidatel in the context of recent negotiations between PTV and the Respondents for the sale of PTV's interest in Unitel, and (ii) exaggerate the value of PTV's outstanding interest in Unitel for the financial purposes of Oi.
(b) As such, PTV's claim amounts to: (i) an abuse of the arbitral process (which the Tribunal has power to restrain in order to protect the integrity of the process before it); and/or (ii) an abuse of rights and a breach of PTV's good faith obligation (under Article 762(2) of the Angolan Civil Code) as a matter of Angolan law.
(c) In respect of its defence, Vidatel will rely in particular upon: (i) PTV's gross inflation of its claim; (ii) the assortment of proceedings brought byPTV in the courts of the British Virgin Islands, the Netherlands, France and Angola, designed to maximise pressure upon Vidatel (and Mrs Dos Santos, the owner of Vidatel), the other Respondents and Unitel; (iii) the parallel settlement discussions between PTV and Oi (on the one hand) and the Respondents and Unitel (on the other hand) regarding the potential purchase of PTV's interest in Unitel; and (iv) the reliance placed by Oi in its latest financial statements on the alleged (inflated) value of PTV's outstanding interest in Unitel.
(a) The immediate parties and their ultimate owners are those described in paragraph 7 of the Request (albeit that the legal relevance of vague and subjective labels such as "influential" or "most influential" isnot understood).
(b) The relationship between PTV and the Respondents dates back to 1999/2000 and there has been substantial economic growth in Angola since the end of the civil war in 2002. Unitel has itself grown to a very substantial business with more than 10 million customers and 2,400 employees (albeit that the suggestion that PTV was instrumental in achieving that growth is incorrect and denied by Vidatel).
(c) Unitel is a major Angolan telecoms company of which PTV (subject to Vidatel's counterclaim below) and the Respondents are each 25% shareholders, all four of them being parties to a Shareholders' Agreement dated 15 December 2000 (subject to the validity of PTV's entitlement to retain its shareholding as against the Respondents).
(d) The Shareholders' Agreement and the Management Agreement between Unitel and PTV of the same date sought to govern the parties' relationship for the establishment and operation of a mobile telecommunications network pursuant to a licence received from INACOM.
(e) In so far as PTV provided services to Unitel during the early years of its establishment in the Angolan market, its remuneration for such services was expressly set out in Article 5.1 of the Management Agreement. Beyond this, the relevance of paragraph 8 of PTV's Request isnot understood.
(f) The express terms of the Shareholders' Agreement include those quoted or summarised at paragraphs 9 to 16 of the Request. Vidatel reserves the right to refer to the Shareholders' Agreement for their full terms, meaning and effect.
""Affiliated Company" means any company, now or hereinafter existing, which, directly or indirectly, controls a Party or is controlled by or is under common control with such a Party; a person "controls" a company, if it, directly or indirectly, holds or is beneficially entitled to, other than by way of security interest only, more than 50% of its voting rights, income or capital, alone or in combination with another Affiliated Company.
6.1 None of the SHAREHOLDERS shall sell, assign, transfer, pledge, encumber, hypothecate or in any other manner dispose of or part with its right, title or interest in any shares in Unitel, or any rights arising therefrom or attaching thereto, now or at any time hereafter held by either, or, suffer or permit any such shares to be in any manner transferred, by operation of law or otherwise, except in accordance with the provisions of this clause 6 or with the consent of the other Parties.
The SHAREHOLDERS shall, however, be free to transfer their shareholding in Unitel to any of their Affiliated Companies, as amended, and such transfer shall not be regarded as a transfer of shares as contemplated in this clause 6.
Where any of Parties' Affiliated Companies which holds the shares in Unitel is disposed of by any SHAREHOLDER, that SHAREHOLDER shall ensure that the shareholding in Unitel shall be returned to it prior to disposal and shall not be disposed of as an asset of their Affiliated Companies.
In the event of a transfer stipulated above taking place such SHAREHOLDER shall ensure that such Affiliated Companies becomes a Party to this agreement as is envisaged in terms of clause 6.4.
6.2. If any of the SHAREHOLDERS (selling party) desires to transfer any or all of its shares in Unitel, the selling party shall give notice of its intention to transfer, and the terms and conditions of any offer received from a third party, if any, to the other SHAREHOLDERS. Such notice shall constitute an offer to the other SHAREHOLDERS, on the same terms and conditions as contained in the notice. The other SHAREHOLDERS shall have the right, at its option, to purchase, pro rata, the offered shares at the price and on the terms contained in the offer, for the offer of any third party, if any, may be accepted by the selling party.
6.3. In the event that any or all of the other SHAREHOLDERS do not elect to purchase such shares within 30 (thirty) days after the receipt of the said notice of intention to sell, or it refuses to purchase all such shares offered for sale, then the selling party shall have the right to transfer such shares not purchased by any or all of the other SHAREHOLDERS to a third party, provided that the terms and conditions of a transfer to the third party (including, but not limited to, price) shall not be more favourable than those offered to the other SHAREHOLDERS.
6.4. The third party transferee shall, as a condition of the transfer, submit to the other SHAREHOLDERS and Unitel a written statement stating that the transferee agrees to being a Party to and to be governed by all of the terms and provisions of this agreement and to be fuIly bound by the terms thereof, assuming all obligations of the Party from which it has purchased the shares. No SHAREHOLDER shall sell any shares to a third party unless the provisions of this clause are included as a term of that sale.
6.6. Any share transfer under this clause 6 shall be subject to any necessary governmental validation or approval, if any.
9.7 Notwithstanding any other stipulations of this agreement, the following issues may only be decided upon by a resolution of a General Meeting of the shareholders of Unitel adopted by shareholders holding in aggregate at least 75% of the shares in Unitel:
9.7.1 issue, allotment, redemption, purchase or grant of options over any Unitel shares or other securities or any reorganization of Unitel's share capital;
9.7.2 alteration of the articles of incorporation or by-laws (or equivalent constitutional documents) of Unitel or … passing any resolution [for] its winding-up or liquidation;
9.7.3 any change in the nature or scope of Unitel's business or the commencement of any new business not being ancillary or incidental to such business;
13.1. In the event that any SHAREHOLDER shall commit a breach of any material obligation imposed upon it by this agreement or allow its shareholding in Unitel to be attached under any circumstances (in event of default), then the all (but not some) of non- defaulting SHAREHOLDERS shall be entitled at their discretion to serve a notice of termination on the defaulting SHAREHOLDER whereupon the provisions of sub-clause 13.2. shall apply.
13.2. Upon service of a notice of termination pursuant to sub-clause 13.1. the SHAREHOLDERS shall negotiate in good faith either with a view to finding a third party purchaser for all of the shares of the defaulting SHAREHOLDER or with a view to the non-defaulting SHAREHOLDERS purchasing, pro rata, the shares of the defaulting SHAREHOLDER, in either event at net asset value.
If no purchaser is found for all the shares of the defaulting SHAREHOLDER and the other SHAREHOLDERS do not purchase the shares of that SHAREHOLDER within a period of four months from date of the relevant notice of termination, the SHAREHOLDERS shall procure that Unitel be wound up. For this purpose each of the SHAREHOLDERS undertakes with the other of them to vote in favour of the resolution for winding up. [In the event of such liquidation, PTI would have the first option to purchase any of the assets of Unitel, at the value that the asset was taken into Unitel at the commencement of this joint venture or, at fair market value, whichever is the lesser.]
13.4 Should the SHAREHOLDERS be unable to agree on the net asset value of Unitel the matter shall be referred to the auditors of Unitel for their determination."
(a) the express language of Article 6.1, in particular the wide scope of the prohibition on transfer and the references to not "in any other manner" disposing or parting with "its right, title or interest in any shares", or "suffer or permit any such shares to be in any manner transferred, by operation of law or otherwise";
(b) the obvious intention of the Unitel shareholders, as appearing from the terms of the Shareholders' Agreement and the circumstances in which it was entered into, namely, that no third party outside the original four shareholders and those owning or controlling them would acquire an interest in Unitel without the consent of the other shareholders and those owning and/or controlling them;
(c) the purposive and flexible approach under Angolan law towards the interpretation of such transfer restrictions; and/or
(d) the general duty of good faith under Article 762(2) of the Angolan Civil Code.
(a) PTV's ongoing status as shareholder, and hence its standing to bring claims under the Shareholders' Agreement, only exists by virtue of its own failure, in breach of Article 6.2 of the Shareholders' Agreement, to offer its shares for sale to the Respondents;
(b) its standing to initiate these arbitration proceedings is not therefore a legitimate standing but derives from a breach of contract;
(c) PTV's failure to comply with Article 6.2 of the Shareholders' Agreement therefore operates as a defence (exceptio) to the claims brought by PTV against Vidatel irrespective of whether those claims could have succeeded if brought whilst PTV remained in the control of PT Telecom;
(d) further, or alternatively, Vidatel is entitled to and seeks a declaratory award by wayof counterclaim: see further below at paragraph 86(d);
(e) in the yet further alternative, Vidatel will contend that such liabilities as it may be held to have incurred to PTV as alleged in the Request are themselves the result of PTV's breach of Article 6.2 as aforesaid and Vidatel will therefore (i) counterclaim damages for breach of contract against PTV, and (ii) if necessary, rely on such counterclaim by way of set-off and/or as a defence of circuity of action against PTV's claims;
(f) the balance of this Answer is without prejudice to the above contentions.
(a) References to a "suspension" of PTV's rights (Issue 5 in Section C of PTV's Request) arose in the context of PTV having betrayed the trust and confidence of its fellow shareholders by allowing new investors into the capital structure of Africatel without the Respondents' prior knowledge or approval. PTV then compounded the situation by failing to follow through on the proposal (discussed between all four shareholders of Unitel) that PTV should exit its investment in Unitel. An already difficult situation was made worse still in 2014 by PTV's breach of Article 6.2 of the Shareholders' Agreement as described in paragraphs 9 to 15 above. The purported suspension has not, in any event, caused any loss to PTV (and Vidatel expressly denies that it did so in so far as the contrary is alleged by PTV).
(b) So far as Unitel's corporate governance and documentary records are concerned, in so far as those records (in particular as regards the decision-making of its corporate bodies and officers) may not be as detailed and complete as they could be or indeed as Vidatel had believed that they were (as to which Vidatel makes no admissions), this is to be understood in the Angolan context, where matters may be handled somewhat informally, as PTV well knows, given the fact that until very recently it had a designated representative on the board of Unitel. It would be unreasonable therefore, in the circumstances to consider that such lack of formality amounts to evidence of wrongdoing, let alone fraud or conspiracy, nor does it mean that PTV has suffered any loss as a result. Moreover, as mentioned at paragraphs 3(c) and (d) above and explained further at paragraphs 18 to 30 below, questions of corporate authority and validity and/or as to whether wrongs have been committed byor against Unitel are outside the scope of this arbitration.
(c) In relation to Tokeyna, Vidatel does not accept that PTV was (as it claims) previously unaware that Tokeyna is a Unitel vehicle, incorporated byor at the direction of Unitel and for Unitel's benefit albeit that, for administrative reasons and at Unitel's request, the legal title to its shares has been held on an interim basis by Mrs Dos Santos. Insofar as PTV's complaints in this respect are based on a misunderstanding of the role of Tokeyna then those complaints fall away in light of this explanation.
(d) In any event, the significance of Tokeyna within these arbitral proceedings falls away for a second reason, namely the intention on the part of Unitel to cancel and/or reverse the Tokeyna transactions so that from the perspective of Unitel (and hence PTV as a shareholder) it is as though those documents and the related transactions were never executed. At the time of writing this cancellation and/or reversal has not yet been effected, but Vidatel understands it to be imminent and on any view will have occurred prior to the Tribunal making any award.
"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 …"
(a) dividends due and owing from Unitel have been improperly withheld: see paragraphs 34 to48 of the Request;
(b) various high-value transactions purportedly entered into by Unitel with third parties are in truth null and void (see paragraph 45of the Request);
(c) BFA dividends received by Unitel have not been credited (see paragraphs 48 to50 of the Request); and
(d) information rights with respect to the affairs of Unitel have not been respected (see paragraphs 53 to57 of the Request).
(a) fail even to identify what it is that Vidatel as shareholder is said to have done or failed to do to prevent Unitel from making such payment;
(b) fundamentally and crucially misunderstand the nature of PTV's legal entitlement (which is to participate in Unitel's profits in Kwanza);
(c) overlook the acute and widely publicised foreign exchange difficulties in Angola and the chronic shortage of US Dollars;
(d) proceed on an incorrect premise as to the sums received by Vidatel; and
(e) wrongly assume that the mere delay in payment of a debt by Unitel (a creditworthy entity) entitles PTV to claim the full amount as damages as against Vidatel.
(a) an application is made to a commercial bank to expatriate dividends outside of Angola;
(b) the commercial bank will apply to the Angolan Central Bank for permission to convert the dividends into US Dollars and subsequently expatriate them outside of Angola;
(c) once and only if such approval is granted, the commercial bank will convert the dividends. Conversion of the Kwanza to US Dollars will then depend on the availability of US Dollars within the commercial bank in question.
(a) if Unitel failed to take the necessary steps to secure such approval, then that is not a complaint which can be levelled at Vidatel. Indeed, Vidatel has no visibility of, nor ability to control, the affairs of an entirely separate corporate entity as is Unitel, let alone a corporate body within Unitel;
(b) if the purported contracts need to be unwound as a consequence of their invalidity then that will need to be considered in some other forum;1
(c) nevertheless, even on the basis of Vidatel's limited information, it appears that the question of authorisation may not be clear-cut. Although the Audit Committee may not have been asked for or given their approval as to specific contracts, it appears that they did approve some or all of the annual accounts in which the economic effects of those transactions are clearly and unambiguously reflected;
(d) further and in any event, Vidatel does not accept (as alleged at paragraph 45 of the Request) that the loan transactions between Unitel and Unitel International Holdings were in the nature of transactions between Unitel and its directors (directly or through another person or intermediary) within the meaning of Article 418 of the Angolan Commercial Companies Law. Even if they were, Vidatel denies that PTV is entitled to complain of the matter in this arbitration and/or seek any relief (including damages) in respect thereof because:
(i) PTV has expressly agreed under Article 9.6.5 of the Shareholders' Agreement that 4 out of 5 directors on the Unitel Board of Directors can approve contracts between Unitel and its shareholders and/or the latter's Affiliated Companies (which agreement, on PTV's own case as to the ownership of Unitel International Holdings, must apply to the loan contracts between Unitel and Unitel International Holdings);
(ii) PTV implicitly accepts that the 4 directors of the Unitel Board other than the director appointed by PTV approved the making of those loans; and/or
(iii) those 4 directors could in any event have approved the making of those loans pursuant to Article 9.6.5;
(e) it is denied in any event that these loan transactions have caused any loss to Unitel.
(a) PTV's legal adviser (Maria Manuela Cunha) was allowed to access and inspect Unitel's records at its registered office pursuant to a shareholder's statutory right of inspection at a company's registered offices under Article 320 of the Angolan Commercial Companies Law;
(b) In any event, to the extent that PTV complains about any lack of access to the records of Unitel, or any alleged refusal to allow copies to be made this is not a complaint which can sensibly be levelled at Vidatel. The Claimant should take this issue up with Unitel (and in fact has);
(c) There has been no scheme to "sideline" or "oust" PTV2 and insofar as PTV's complaint is that documents and information packs have been supplied at or only shortly before meetings (allegedly in breach of Article 321(2) of the Angolan Commercial Companies Law) then any such breach was non-material, as this is how matters have been organised as between all attendees at those meetings, and no loss has been suffered by PTV as a result;
(d) If, which is also denied, there have been shortcomings in the record-keeping and administration at Unitel (see paragraphs 17(b) and 55 above), this is not due to any conspiracy but instead the consequence of Unitel's rapid and exponential growth, with which its administration has sometimes struggled to keep pace; and
(e) The competing pressures on the management of Unitel, as well as its shareholders, are also why PTV's letters have on occasions gone unanswered.
(a) do not constitute "a change in the capital structure of Unitel" within the proper scope and meaning of Article 8.1 of the Shareholders' Agreement; or
(b) alternatively, that by virtue of Articles 9.7.1 of the Shareholders' Agreement which takes precedence over any other conflicting provision of the Shareholders' Agreement ("Notwithstanding any other stipulation of this agreement"), the proposed increases are a "reorganisation of Unitel's share capital" which the Respondents, as holders in aggregate of 75% of the shares of Unitel, were and are entitled to vote upon irrespective of PTV's objection (if there is any such objection).
(a) the value of its equity interest in Unitel has been lost entirely (notwithstanding that (subject to Vidatel's counterclaim below) PTV remains the legal and beneficial owner of this interest and that PTV's indirect parent Oi still values it on its books at around USD 1.3bn);
(b) its entitlement to payment of dividends from Unitel is worthless (notwithstanding that Unitel is a creditworthy debtor which recognises PTV's dividend entitlement in all relevant financial statements); and
(c) PTV has suffered a loss of 25%of the sums allegedly "looted" from Unitel.
(a) decline to deal with any of PTV's complaints which are in substance allegations against Unitel, or which in any event cannot be fairly adjudicated upon in proceedings to which Unitel is not and cannot be a party and clearly fall outside of the scope of the arbitration clause and jurisdiction of the Tribunal, such as is the case with matters regarding (a) payment of dividends and related damages, (b) validity of and alleged damages arising from contracts and agreements entered into by Unitel with Tokeyna and / or Unitel International Holdings and BFA, and (c) alleged violation of PTV's information rights under Angolan law;
(b) stay and refuse jurisdiction on the matter of the shareholders resolutions allegedly passed in the 15 December 2014 General Meeting;
(c) in any case, dismiss all claims made by the Claimant;
(d) declare in relation to the First Respondent's Counterclaim that:
(i) PTV is in breach of a material obligation under the Shareholders' Agreement by reason of the Oi acquisition;
(ii) upon a notice of termination being served upon PTV by all three Respondents terminating the Shareholders' Agreement PTV shall be obliged to negotiate in good faith with a view to selling its shares atnet asset value to either a third party purchaser or, pro-rata to the Respondents and furthermore obliged to recognize and accept that should the Shareholders be unable to agree on the net asset value of Unitel the matter be referred to the auditors of Unitel for their determination.
(e) in the event that anyof the Claimant's claims for damages succeeds, order that the Claimant pay damages or an indemnity to the First Respondent for damages due to breach of Article 6 of the Shareholders' Agreement, the full extent of which will meanwhile be assessed and quantified and with appropriate set-off as between claims and cross-claims; and
(f) order that the Claimant pay the First Respondent all costs and expenses incurred bythe First Respondent in relation to this arbitration.
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