C&WJ shareholder gets green light to sue in US court

Cable & Wireless Jamaica, C&WJ, has lost its appeal against the decision of the Supreme Court that there is nothing precluding a Jamaican court from granting permission for the hearing of a claim outside of the country.

The ruling means that C&WJ shareholder Eric Jason Abrahams has been given the clearance to sue the company in a United States court.

C&WJ, which trades as Flow Jamaica, is part of the Cable and Wireless group. The British company is now owned by American company, Liberty.

Abrahams is seeking to take legal action, claiming that financial transfers to its British parent company, Cable and Wireless Communications Plc, have weakened the local telecoms over time. C&WJ was heavily indebted to its parent, loans that it serviced from its earnings.

He sought permission to bring a derivative action, that is, a lawsuit brought by a corporation shareholder against the directors, management, and/or other shareholders of the corporation.

According to court documents, Abrahams wants to file claim in the United States against C&WJ’s directors, former directors, and shadow directors.

C&WJ’s lawyer, Denise Kitson, QC, had opposed the application, and argued, both in the Supreme Court as well as on appeal, that the local court has no jurisdiction to grant permission for the claim to be heard outside of Jamaica.

However, Justice David Batts ruled in October 2018 that there is nothing in the Companies Act, or the principles stated in the authorities, to preclude the granting of such permission, a decision that the telecoms appealed.

In a ruling handed down last Friday, September 25, a three-member panel of the Court of Appeal, comprising Justice Patrick Brooks, Justice Carol Edwards and Justice Nicole Foster-Pusey, affirmed Justice Batts’ ruling.

Justice Brooks, who wrote the judgment, noted that Abrahams is one of the minority shareholders of C&WJ. His shareholding, however, at a claimed 63,661,018 shares was not insignificant, he said.

According to the judgment, Abrahams contended that the conduct of C&WJ’s board of directors over the years 2010-2017 was to the prejudice of the company and its minority shareholders.

Abrahams reportedly wants million of dollars in assets repatriated to C&WJ’s books, according to his legal team. Such a lawsuit would improve the value of the company, argued Abrahams’ team from the law firm Hart Muirhead and Fatta, who first filed action in the court in November 2017.

CWC Plc, CALA Holdings, and C&WJ are all ultimately owned by Liberty Global, which acquired the British telecoms and its regional holdings in 2016.

C&WJ’s attorney Denise Kitson was not reached for comment as to whether the company will be further appealing the matter.

mcpherse.thompson@gleanerjm.com