Cablegate: 2007 Cote D'ivoire Report On Investment Disputes And


DE RUEHAB #0676/01 1771136
R 261136Z JUN 07




E.O. 12958: N/A

REF: STATE 55442

1. (SBU) Embassy Abidjan is aware of no new investment
disputes or expropriation claims involving U.S. persons against the
Government of Cote d'Ivoire.

2. (SBU) Post is pleased to report the end of the sole outstanding
investment dispute reported from Cote d'Ivoire, the Cora de Comstar
matter. On May 17, 2007, U.S. shareholders of Cora, which included
Western Wireless and the Modern Africa Fund, an investment firm with
capital guaranteed by the U.S. Overseas Private Investment
Corporation, settled the long running dispute with the government of
Cote d'Ivoire for USD six million and indemnification by both
parties against future legal action related to the dispute.

3. (SBU) Background of the Case:

In 1997 the Texas firm Wireless Communications Technology (WCT)
obtained the first Ivoirian cellular telephone operating license,
created the Ivorian cell phone company Comstar, and contracted with
Alexandre Galley's Belgian company, GA Holdings, to provide USD 70
million in start-up capital in exchange for a 51 percent stake in
Comstar. Galley, is an Ivoirian businessman who is on the UN
Liberian sanctions list and is an international fugitive reportedly
living in Abidjan. When Galley failed to perform, WCT won
nullification of the contract and Galley's ownership claim by a
Belgian Court.

In January 2000, ignoring the Belgian judgment against him, Galley
filed suit in an Ivorian court alleging that WCT did not have the
legal right to sell Comstar to a consortium of Western Wireless
International and the Modern Africa Fund because Galley held a 51
percent share, and therefore, at least 51 percent of the
then-functioning cell phone company Cora belonged to him. In May
2001, the Ivorian Supreme Court ruled in Galley's favor and
reinstated his claim to 51 percent ownership. After Galley won
local judgment against Cora shareholders, he began a series of
attempts to seize Cora's offices and financial assets. In June
2001, under the then-newly elected President Gbagbo's
administration, the Ivorian government announced a new USD 54
million fee for the issuance of a permanent license to Cora.

In March, 2002, an out-of-court settlement between Galley and Cora
shareholders was reached in which in exchange for payments of USD
750,000 in ten installments, Galley agreed to renounce his claim.
When Galley's lawyer seized the tenth payment (as Galley had not
paid him for his services) Galley claimed that the settlement
agreement was null and void. The result was that even though Cora
shareholders had technically satisfied the terms of the agreement,
Galley's claim enabled the legal harassment in Cote d'Ivoire of Cora
to continue.

On July 31, 2003, Cora and the Ivorian Government signed a
Memorandum of Understanding, agreeing to work together to resolve
the issue. Despite the MOU, Galley's harassment of Cora continued.
On October 9, 2003, accompanied by 25 armed policemen, Galley
invaded Cora's offices and forcibly evicted Cora's management and
staff. After this event, Cora shut down its network service to
33,000 customers.

Cora's shareholders maintained that the Ivorian government's failure
to protect the investment amounts to an expropriation by the
government of its USD 43 million investment in favor of an
international fugitive, Mr. Galley. In December 2003, Cora
shareholders formally filed a claim of expropriation against the
Government of Cote d'Ivoire at the International Center for the
Settlement of Investment Disputes (ICSID), seeking at least USD 54
million in damages.

The Ivorian Government set up an inter-ministerial committee to
study the matter and pledged to enter into good faith negotiations
with Cora's investors with a view toward finding a mutually
acceptable final settlement. In 2004, the Ivorian government
acknowledged that Cora shareholders had indeed satisfied the terms
of the settlement.

In June 2005, the Ivorian government sold Cora's operating license
to a new operator for $54 million, significantly reducing Cora's
residual value.

In February 2006, a team led by the Minister of Telecommunications
and New Technologies signed a draft settlement agreement with Cora's
shareholders. The outlines of this agreement led to the May 2007
settlement of the case.

Throughout this process, the U.S. Ambassador, as well as a number of
other U.S. officials, made direct appeals to Ivorian government
authorities to protect Cora's assets and its cellular operating
license and ensure fair, equitable treatment in the justice system.
Cora shareholders have expressed their thanks to the U.S. government
at the Departments of State, Commerce as well as the U.S. Trade
Representative for assistance rendered in solving this problem.


© Scoop Media

World Headlines


Gordon Campbell: On The Washington Riot And The Georgia Results
Hong Kong and Washington DC. On the same morning, the tyrants in power in Beijing and their counterpart in the White House have shown how they refuse to accept the legitimacy of any different points of view, and the prospect of losing power… More>>

WHO: Vaccination No Guarantee Of Virus Eradication

In the final World Health Organization (WHO) COVID-19 press conference of the year, on Monday, senior officials warned that the virus is 'not necessarily the big one', and that there is a real chance of another, more serious pandemic spreading ... More>>

Covid: Two Billion COVID Vaccine Doses Secured, WHO Says End Of Pandemic Is In Sight

The end of the pandemic is in sight but we must not let our guard down, the head of the World Health Organization (WHO) said on Friday, as he welcomed the news that the global vaccine partnership COVAX has lined up almost two billion doses of existing ... More>>

UN: Guterres To Seek Second Five-year Term
António Guterres will be seeking a second five-year term as UN Secretary-General, which would begin in January 2022.... More>>

UN Rights Office: Iran Execution Of Child Offender Breaks International Law

The execution of an Iranian man for a crime allegedly committed when he was 16 years old has been condemned by the UN Human Rights Office (OHCHR) and raised concerns over violations of his right to a fair trial. In a statement released on Thursday, ... More>>

UN News: Fighting Displaces Over 500,000 In Northern Mozambique, Reports UN Refuge Agency

Attacks by armed groups in Mozambique’s Cabo Delgado, Nampula, Zambezia and Niassa provinces have displaced more than 530,000 people, many of whom have been forced to move multiple times, the UN refugee agency (UNHCR) said on Friday. According to ... More>>