Dispute over multimillion dollar transferred to Princess Pilolevu, Tongasat heads to Supreme Court

Tongan Princess Pilolevu Tuita and Prime Minister 'Akilisi Pohiva. Picture: KANIVA TONGA NEWS

NUKU’ALOFA, 18 JUNE 2018 (KANIVA TONGA NEWS) — The dispute over a payment of US$25,450,000 made by a former Tongan government to Princess Pilolevu Tuita and her Tongasat Satellite company will be heard in court today.

The money was paid by the Republic of China to the Government of Tonga in May 2011 and paid to or for the benefit of Tongasat in around June of that year.

Prime Minister ‘Akilisi Pōhiva argued that the payment to or for Tongasat was unlawful within the meaning of the Public Finance Management Act.

Pohiva, who began the case in 2013 when he was in opposition, and the Public Service Association (PSA) wanted Tongasat and the Princess to pay back the money to the government.

Kaniva News understands the lawyer for Pohiva and PSA, Dr Rodney Harrison from New Zealand has arrived in Tonga .

The hearing today comes after Pōhiva won a legal fight with Tongasat in May 2017 over the refusal of the company to release documents regarding the transfer of the money.

At the time, the Lord Chief Justice Owen Paulsen ordered that Tongasat and the Kingdom of Tonga clearly state what documents they had relating to the transfer of Chinese money to Princess Pilolevu’s company.

Tongasat argued that it had an Exclusive Agency Agreement with the Kingdom to market and manage the licensing and  frequency  assignments of orbital slots registered by the Kingdom with the International Telecommunications Union.

In its submission to the Supreme Court it claimed a dispute had arisen with China Electronic System Engineering Company (CESEC), a corporation associated with the People’s Republic of China (PRC), over its unlawful use of the orbital slot at 130°E.

Tongasat said it concluded on behalf of the Kingdom a settlement with CESEC under which CESEC would pay US$49,900,000 in two tranches of US$24,451,000 on 31 July 2008 and US$25,449,000 on 31 December 2010 and that Tongasat was to receive 50 percent of the first payment and, subject to further negotiations, 50 percent of the second payment.

Tongasat alleged that at the request of CESEC and the Chinese government the money was recorded as aid grant money and not as settlement of the dispute.

This was for reasons of ‘State discretion,’ but in the knowledge that it was really a payment for the unlawful use of the orbital slot.

The judge criticised the satellite company’s defence.

“The logic underlying Tongasat’s statement of defence is sometimes difficult to follow,” he said.

“There are important pieces of the jigsaw missing,” he said.