Supreme Court Orders Tongsat, Government To Turn Over Payment Documents

PM, Public Service Association's lawsuit claims millions of dollars illegally paid to satellite firm by Chinese company

NUKU‘ALOFA, Tonga (Matangi Tonga, July 7, 2017) – The Supreme Court has ruled in favour of an application by the Public Service Association and ‘Akilisi Pohiva to recover further documents from defendants, Kingdom of Tonga and Tongsat, in an ongoing legal proceeding, in which they essentially claimed the unlawful payment of millions to Tongasat, for the use of orbital slots by a Chinese company.

Plaintiffs, PSA and Pohiva's original statement of claim, focused on the payment of the USD$25,450,000 made by the Government of the People’s Republic of China to the Government of Tonga in May 2011, which was then paid to or for the benefit of Tongasat in around June 2011.

“The essential allegation is that the payment to or for Tongasat was unlawful in breach of the Public Finance Management Act 2002.”

The plaintiffs had also claimed that this second tranche payment was an aid grant and described as such under an Agreement on Economic and Technical Cooperation, between the Governments of Tonga and People's Republic of China dated on April 9, 2011 and also public money, within the meaning of the Act.

Application

Lord Chief Justice O.G. Paulsen said this ruling on 19 May, was about the plaintiffs' application for leave to file nunc pro tunc, an amended statement of claim for further and better discovery of documents from both defendants.

He said the first defendant, the Kingdom of Tonga did not oppose any of the orders but the Friendly Islands Satellite Communications, trading as Tongasat as second defendant, opposed each of the plaintiffs' applications.

The amended claim repeats the original with only minor changes and differs only on two principle matters, which the plaintiffs claimed they were previously unaware of.

The court heard that Tongasat had argued that the plaintiffs should not be granted leave to file an amended statement of claim because they are seeking to raise new causes of action of which they have no standing and because the causes of action are time barred.

It also opposed the application for further and better discovery, principally on the grounds that the documents sought are not relevant to any matter the plaintiffs can legitimately raise in the action and disclosure of them is unnecessary.

Grant leave

The Chief Justice, however, ruled for the plaintiffs granting them leave to file their amended statement of claim in this proceeding in terms of the first amended statement of claim.

He also ordered that Kingdom of Tonga and Tongasat make affidavits stating whether it has in its possession custody or power any documents related to issues arising between the parties to this proceeding.

Further applications was adjourned to be called on June 23 for further consideration.

Slots

The background is that, Tongasat had in its defence said it had an Exclusive Agency Agreement with the Kingdom to market and manage the licensing and frequency assignments of orbital slots registered by the Kingdom with the International Telecommunications Union.

A dispute arose with the China Electronic System Engineering Company CESEC, a corporation associated with PRC, over its unlawful use of the orbital slot at 130 degrees.

Tongasat said it concluded on behalf of the Kingdom a settlement wich CESEC under which this company would pay USD$49,900,000 in two tranches of USD$24,451,000 on July 2008 (the first tranche payment) and USD$25,449,000 on December 2010 (second payment) and Tongasat to receive 50 percent of the first payment (subject to negotiation) and another 50 percent of the second payment.

It then pleaded that the second tranche payment was collected by the Kingdom and paid to it in performance of its obligation under the Exclusive Agency Agreement and later that it received the second payment in consideration for the mutural termination of this agreement.

Matangi Tonga Magazine
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