Unilever defies court order

The failure of Unilever Ghana Limited, a soap and beverages manufacturing company in Ghana, to pay Dominion Manufacturing Company an amount of 1,34738,174 billion old Ghana cedis as compensation, as ordered by the Ghana Arbitration Center, has seen the latter’s production run down due to lack of funds.

Unilever

Uniliver’s refusal to pay the said compensation, Today gathered, is because Uniliver believes that the trial was not fair. That decision by Uniliver has made a mockery of the judge who presided over the case and the country’s judicial system.

In a copy of a report of the Ghana Arbitration Center singed by the administrator and the arbitrator, Kizito Beyuo, and dated 23/12/2009, which has been sighted by Today, Unilever Ghana, which was the defendant in this case, was ordered to pay for damages for the unilateral termination of two contracts signed between them and the Dominion Manufacturing Company Ltd.

On October 15, 2003 Unilever Ghana entered into agreement with Dominion Manufacturing Ltd., for five years. The latter was to produce 1440mt of ‘Gift soap’ yearly to Unilever Ghana without any interruption whatsoever, and any breach of the said contract was in contravention unless notice was given in three months beforehand.

As part of their previous agreement, Unilever Ghana insisted that Dominion renovate their premises at their own cost to meet their (Unilever) standards.

But in March 2005, Unilever abrogated the contract without due process agreed on in the contract, thereby disrupting the production chain of Dominion Manufacturing and throwing them into a chaotic situation.

And the irony of the whole situation, according to the Managing Director of Dominion, Appiah Frimpong, was that Unilever Ghana only picked 281mt of the agreed quota of 2880mt for two years representing the 1440mt of gift soap per year, leaving a whopping 2599mt creating further financial hardship for the workers of Dominion Manufacturing.

The management of Unilever were said to have accepted responsibility and agreed to pay compensation to reduce the burden they had placed on the indigenous Ghanaian manufacturing company which has employed several people, when the CEO of Dominion manufacturing company Kofi Appiah Frimpong met with their representatives.

However, having waited for about six months and after persistent phone calls which yielded no results, it became evident that Unilever Ghana was in no mood to honour their part of the agreement.

On February 11, 2007 Mr Appiah Frimpong took Unilever Ghana to the Wenchi High Court in the Brong Ahafo region. The case was later referred to the Ghana Arbitration Center.

After months of arbitration, the arbitrator Kizito Beyuo awarded compensation to Dominion Manufacturing on December 2009. The award for general damages and breach of contract was to attract interest at the prevailing bank rate from May 2, 2005 and a downtime due under the contract was to attract interest from February 1, 2006.

Unilever treated the instructions of the arbitrator with disdain, and not even a reminder from the counsel of Dominion, lawyer Kweku Frimpong, to Unilever for them to honour the court’s decision yielded any favourable results.

As of February 2, 2010 when the reminder was dispatched, the total award calculated using Ghana Commercial Bank system stood at1, 34738,174 old Ghana cedis.

“This is a clear indication that Unilever has no regard for the orders of Ghana’s judicial system and moreover they are bent on killing indigenous companies in Ghana which the government is trying so hard to protect to enable them create more jobs for Ghanaians,” Mr Appiah Frimpong told Today.

Following the crisis, Dominion Manufacturing Limited has collapsed due to lack of funds as most of their cash has been entrapped in this Unilever deal.

STORY: FROM JAMES APPIAKORANG JNR., KUMASI