Business News of Thursday, 5 October 2017
A company in Kumasi, Micro Mobile Links Limited, has sued Millicom Ghana Limited, claiming GH¢3,966,578 damages for breach of contract.
Micro Mobile Links is also claiming interest on the amount from the date the contract was terminated on January 3, 2017 until the case is determined and general damages and cost from Millicom Ghana Limited.
The suit, filed at the Ghana Arbitration Centre on behalf of Micro Mobile Links by Appiade Chambers, contended that in 2007, Millicom Ghana Limited, operators of Tigo, entered into a partnership with the Micro Mobile Link Limited to provide direct selling and distribution of Tigo products within an assigned territory in the Ashanti Region.
In its statement of claim, the Micro Mobile Links Limited stated that the contract with Tigo Ghana specified that the territory where Micro Mobile Links was to provide the direct selling and distribution of the Tigo products in the Ashanti Region were from Dadieso through Nkenkansu on the Kumasi-Techiman road, from the Ejura on the Mampong road to the Tepa Junction on the Kumasi -Sunyani road and from the Kumasi-Obuasi road to the River Offin Tollbooth.
The statement averred that Tigo Ghana contracted Micro Mobile Link to provide the direct selling and distribution services after realising that the company had marketing and direct sales capabilities and expertise to execute the contract.
It said pursuant to the agreement, Micro Mobile Links duly provided the services to the satisfaction of Tigo Ghana within the assigned territory.
It added that desirous to increase the volume and range of its business, Tigo Ghana used letters, emails and verbal communications to contact Micro Mobile Links to expand its distribution territories in and around the region to the Brong Ahafo Region.
It explained that that was after Delmes, a company which was distributing Tigo products in the Brong Ahafo Region, pulled out, thus compelling Tigo Ghana to contract Micro Mobile Links to take over in the region.
It said after Micro Mobile Link started the distribution of Tigo products, Tigo Ghana added Tigo cash to their products and,therefore, fell on Micro Mobile Links to sell Tigo cash and other products to their clients in the two regions.
The statement of claim explained that the addition of Tigo cash to the contract caused Micro Mobile Links to employ additional personnel to execute the contract.
It said the company also rented additional offices in specific communities in the two regions to enhance effective and efficient discharge of its responsibilities.
Additionally, Micro Mobile Links said it undertook some infrastructure developments at a huge cost to make the distribution and selling of the Tigo products in the assigned areas attractive and more meaningful.
Termination of contract
According to the statement, Tigo Ghana was required to take full responsibilities for the huge cost of capital and financial outlays made by Micro Mobile Links to undertake the distribution and selling of Tigo products in the expanded territories, but by a letter dated January 3, 2017, Tigo Ghana gave notice of the termination of the contract and carried out the termination, leading to a huge financial loss to Micro Mobile Link.
It said Tigo Ghana justified the termination of the contract by alleging that Micro Mobile Links had signed a contract to deal with Airtel as a distributor in Accra, which was outside the territories assigned for the distributions of the said products.
It said besides refusing to take responsibilities to pay for the huge cost incurred in purchasing vehicles, motorbikes and developing of infrastructure, as well as rented accommodation to provide the distribution and selling of Tigo products in the expanded territories, Tigo Ghana also failed to pay some arrears in financial commitments which accrued in December 2016 to Micro Mobile Link.
According to the statement, the action of Tigo Ghana against Micro Mobile Links was a breach of contract which was entered into in 2007.
The statement explained that the termination of the contract rendered the vehicles and motorbikes meant for the distribution of the Tigo products immobile, causing them to deteriorate at a faster rate, thus forcing Micro Mobile Links to sell them at a reduced cost.
It said it also led to the laying off of personnel and payment of compensation at a huge cost, adding that the failure of Tigo Ghana to settle the financial loss occasioned by its purported termination of the agreement and breach of further agreement between the two parties occasioned damages to Micro Mobile Links, hence the suit.
In response, Tigo Ghana denied that it terminated the contract without any cause, explaining that Micro Mobile Links breached the contract agreement on territorial dealership by registering a new company to deal with products of Airtel.
It said any purported loss suffered by Micro Mobile Link had no relation with the termination of the territorial dealership agreement and noted, therefore, that the company was not entitled to any relief.
It said the Micro Mobile Links deal with Airtel sought to make them compete with Tigo’s loyal customers in Accra and, therefore, constituted a breach of contract.
Tigo Ghana is, therefore, counterclaiming for damages for the breach of contract and cost against Micro Mobile Links.