VZCZCXYZ0000
RR RUEHWEB

DE RUEHAB #0676/01 1771136
ZNR UUUUU ZZH
R 261136Z JUN 07
FM AMEMBASSY ABIDJAN
TO SECSTATE WASHDC 3182

UNCLAS ABIDJAN 000676 
 
SIPDIS 
 
SENSITIVIE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: EINV KIDE OPIC PGOV IV
SUBJECT: 2007 COTE D'IVOIRE REPORT ON INVESTMENT DISPUTES AND 
EXPROPRIATION CLAIMS 
 
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. 
 
 
 
HOOKS