One mystery surrounding national telecoms revenue assurance supplier Global Voice Group (GVG) is that many people claim to know about GVG but very few seem to know where GVG is. The LinkedIn profile for GVG says they are Spanish and they were founded in 1998. But when they do business in Ghana, GVG says they registered their Ghanaian subsidiary in 1995. Some Ghanaians thought GVG was really from Haiti, which makes sense given that every profile of Laurent Lamothe, former Prime Minister of Haiti, says he founded the company in 1998. Lamothe said he handed over responsibility for managing the company in 2011 upon joining Haiti’s government, with the management team then comprising a CEO, CTO and a Director of Corporate Communications who were all based in North America. Information about powerful people avoiding taxes obtained through the Pandora Papers investigation in 2021 showed that Lamothe set up a GVG holding company in 2008 in the secretive Caribbean tax haven of the British Virgin Islands. When the government of Lesotho wanted to nullify its contract with GVG last year, they were under the impression they were dealing with a company located in South Africa. But when Guinea’s government refused to give GVG millions of dollars to terminate a contract that was allegedly tainted by corruption, Guinea was sued by a version of GVG that says its home is in the East African tax haven of the Seychelles. Confused yet? That is exactly how GVG wants you to be, but keep reading for a little enlightenment that comes courtesy of the ongoing legal battle between GVG and the Republic of Guinea.
So is GVG a Seychelles company after all?
This is what GVG’s own lawyers said about their client in a complaint they filed in a Washington DC court in July 2022 that related to their dispute with the Republic of Guinea.
Plaintiff Global Voice Group SA (“GVG”), by its attorneys, Draper & Draper LLC, as and for its Complaint against Defendant The Republic of Guinea (“Guinea”), alleges as follows:
NATURE OF THE ACTION
1. Plaintiff GVG is a company incorporated under the law of the Seychelles that provides monitoring and supervising consulting services to the finance and telecom sectors and to governments and State entities.
Has GVG always been a Seychelles company?
Their lawyers later state:
Until 2021, GVG’s registered office was located at 1st Floor, #5 Dekk House, De Zippora Street, PO Box 456, Providential Estate, Mahé, Republic of the Seychelles… GVG’s current registered address is: Trident Chambers, P.O. Box 1388, Victoria, Mahé, Republic of Seychelles.
Trident Chambers? What kind of funny-sounding address is that?
It is the kind of address used by businesses that rely on lawyers and trusts to avoid paying tax. Decide for yourself if it is a coincidence that Trident Chambers is also the home of Trident Trust, which provides trust fund administration services in the British Virgin Islands as well.
But we already knew GVG are hypocrites who avoid paying tax whilst claiming telcos are tax cheats. Why does Guinea need to pay them anything?
The telecoms regulator in Guinea foolishly signed a contract in 2009 that allowed GVG to tax telecommunications. They are still trying to extricate themselves from the disastrously expensive consequences of that decision.
On May 22, 2009, Plaintiff GVG contracted with Guinea and The Postal and Telecommunications Regulatory Authority of Guinea (“PTRA”) to provide and install control tools to enable Guinea to view and tax all international telecommunications traffic.
What stops the government of Guinea from simply passing a law that says they do not have to pay?
Guinea’s gpvernment makes the laws in Guinea, but they did not make the laws that govern their contract with GVG. They have to go to France for those laws.
France? What does a national revenue assurance contract in Guinea have to do with anything in France?
The contract with GVG…
…contains an arbitration clause governed by the United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards, dated June 10, 1958 (the “New York Convention”)… Pursuant to the Arbitration Agreement, the International Chamber of Commerce’s International Court of Arbitration (“ICC”) in Paris, France, duly-constituted an arbitral tribunal (“Arbitration Tribunal”)…
To put it simply, if a sovereign country wants an early release from a national revenue assurance contract with GVG they must get the agreement of arbiters working in France.
Incroyable! But this just means there must be arbitration in Paris. How did this legal battle end up in a US court?
On July 18, 2019, the Arbitration Tribunal issued a final award, which found Guinea and the PTRA jointly and severally liable to GVG under the Partnership Agreement, awarding GVG more than $20 million in damages.
Guinea did not want to pay GVG because they felt the contract had been awarded dishonestly by a short-lived military government, so they reacted badly to the award of these damages. Guinea’s hostility to GVG is understandable when you consider GVG’s interpretation of their deal was that they were entitled to payment of USD107mn for early termination of the contract. To put GVG’s demands into context, if Guinea had paid USD107mn in 2019, as GVG asked, then it would have been roughly equivalent to handing over 1 percent of Guinea’s entire economy for the year. Guinea is poor, and their government was not prepared to pay even USD20mn to GVG. They hence appealed the decision to the Court of Appeal of Paris. However, their appeal was not successful.
On September 7, 2021, the Paris Court of Appeal rejected all of Guinea’s and PTRA’s alleged bases for annulment, recognized the Final Award, awarded GVG its legal costs, and dismissed the case.
But Guinea still would not pay, so they prepared a further appeal. Meanwhile, GVG’s lawyers decided they would get their money through the US court system. That is why we have the text of this complaint filed by GVG in a Washington DC court in July 2022.
Both the Seychelles, the country of Plaintiff’s incorporation, and Guinea, are signatories to the New York Convention… Plaintiff’s right to enforce the Final Award arise under the New York Convention… Guinea is not immune from the jurisdiction of this Court [i.e. the one in Washington DC] because the FSIA [Foreign Sovereign Immunities Act] denies immunity to a foreign state (1) that has waived its immunity… and (2) in an action to enforce an international commercial arbitration award.
Guinea and the United States are also each contracting states to the New York Convention… Under the New York Convention a district court “shall confirm” an arbitration award made in another signatory state “unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.”
So what is the current bill to Guinea’s taxpayers, just for ending this contract with GVG?
The amount currently pursued by GVG is USD22mn, which is made up of about USD7.5mn for each year of ‘service’ that remained on GVG’s contract after Guinea threw them out, plus interest and several hundred thousand dollars for GVG’s legal fees. GDP per capita in Guinea was about USD750 per annum during the period of the contract. So the court’s interpretation of the contract means Guinea was expected to give GVG the equivalent of the entire economic output of 10,000 people whilst the contract was in effect. This may be legally correct per a contract that was signed whilst the military ruled Guinea, but it is morally bankrupt.
Has GVG received this money?
The US court sided with GVG and said Guinea should pay USD22mn. But Guinea still did not pay. They have now thrown more lawyers at this case, filing a new motion in the same Washington DC court on January 13. The motion argues that GVG effectively sought a judgment against the wrong entity, because they should have asked for their money from PTRA, the regulator, but they named the government of Guinea in the complaint, although the government was not really a party to the written agreement with GVG. They also argue the lawsuit was not properly served. And if neither of those arguments is persuasive, Guinea’s lawyers still say the decision should be thrown out because the Paris appeals court decision is not final, as another appeal has been lodged in France…
GVG observed in its complaint that, “the Paris Court of Appeal Judgment recognized the [ICC] Award and incorporated it into the French legal system.”… On August 8, 2022, Guinea lodged an appeal of the Paris Court of Appeal Judgment with the French Cour de Cassation. Guinea’s appeal was assigned appeal number A2220121 and remains pending. We have been advised by Guinea’s Cassation counsel that the Cour de Cassation fixed a deadline of February 19, 2023 for the submission of Guinea’s written arguments in support of its appeal. We further understand that GVG will have an opportunity file its own written response, and that the judgment in these proceedings will likely be rendered at the end of 2024.
Some idiot in 2009 wanted to pocket some money by employing an expensive ‘regtech’ company to collect taxes, and lawyers will still be arguing about how much to take from taxpayers in 2024! But what is Guinea’s justification for saying they should not be bound by a contract with GVG?
Guinea’s current government is upset because GVG obtained their contract by negotiating with a military junta that seized power in 2008. It was a long-term contract that required Guinea to hand over a big portion of its tax income until 2017 even though the military had already promised to give power to a civilian government. A democratically-elected government assumed control in 2010 but they remained bound by the onerous GVG contract, leading them to eventually lose patience with a business that was not worth the huge amount of money it extracted from Guinea’s small economy. It is not hard to work out why a bunch of generals who did not expect to be in power for long might have been anxious to take a short-lived opportunity to sign an expensive tax-collecting deal with a business that likes managing its money in secretive tax havens.
Never mind the impression of corruption. A deal is a deal in the eyes of the law.
That is true. But the law is only as strong as the people who enforce it, and that often comes down to physical force. Power in Guinea is in the hands of the military again, after another coup d’état threw out the civilian government that had ruled since 2010. The problem for Guineans is that, irrespective of who runs their country, there are other countries with bigger guns that enforce laws which extend beyond national borders. Those countries seem to be strangely keen on laws which protect powerful people who manage their affairs through tax havens, even whilst they impose hardship on ordinary Africans who simply want to have a phone.
