Vivacell Case: President Kiir’s Unchecked Power Imperils the Future of South Sudan
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Vivacell suspension by government of South Sudan
By PaanLuel Wel, Juba, South Sudan
Wednesday, 06 September 2023 (PW) — In the wake of South Sudan’s recent loss to Vivacell Telecom in an arbitration case that ordered the nation to pay a staggering $2.7 billion, it has become evident that President Salva Kiir’s administration continues to operate under a rule of law reminiscent of the Sudan People’s Liberation Movement/Army (SPLM/SPLA) jungle rule, a mode of governance that has clashed dramatically with the principles of the international rule of law. This case serves as a stark illustration of how President Kiir’s unbridled freedom to rule without institutional constraints has placed South Sudan’s fledgling democracy at risk and jeopardized his liberation legacy in post-independent South Sudan.
The dispute with Vivacell Telecom traces its origins to the turbulent period following the December 2013 civil war, during which the government, under President Kiir’s leadership, took the drastic step of shutting down Vivacell Telecom. It is alleged that this action was a punitive measure against Pagan Amum, a former Secretary-General of the SPLM, who was rumoured to have a stake in the company. This move was emblematic of a governance style driven more by political motivations and emotions than sound legal reasoning.
The government’s initial demand for $66 million in taxes and license fees from Vivacell quickly escalated into a multi-billion-dollar legal battle. A telling indicator of the government’s lack of preparedness was its failure to secure adequate legal representation early in the dispute. A leading law firm approached to defend South Sudan’s interests at the International Chamber of Commerce (ICC) declined, leaving the government without proper legal guidance—a costly oversight that would later contribute to the unfavorable outcome.
Central to the arbitration case was a license agreement dating back to the 2000s between Vivacell and a ministry within the Government of Southern Sudan. The agreement contained an arbitration clause specifying that disputes would be resolved through ICC proceedings in English and seated in Geneva, with no right to appeal any award. Despite South Sudan gaining independence in 2011, Vivacell continued to operate under the same license. The subsequent suspension of Vivacell’s license and the demand for $66 million in fees and taxes were clear indicators of the government’s disregard for established legal agreements and the rule of law.
In November 2022, the sole arbitrator, Jason Fry KC, ruled that he had jurisdiction to hear the dispute, affirming the validity and binding nature of the license agreement when it was concluded. Furthermore, Fry found South Sudan liable for various breaches of contract, paving the way for Vivacell Telecom to seek nearly $2.7 billion in damages, including substantial interest. The Swiss Federal Supreme Court later upheld this arbitration award.
The political implications of this decision are undeniable. Critics argue that the initial shutdown of Vivacell Telecom and the subsequent legal battle were driven by political motivations and emotions rather than sound legal reasoning, further polarizing South Sudan’s already fragile political landscape. This raises fundamental questions about the government’s commitment to the rule of law and the protection of private business interests.
South Sudan has faced numerous challenges and controversies throughout its short history as an independent nation. From joining the East African Community without adequate scrutiny to inking international agreements with significant consequences, the nation’s track record of impulsive decision-making has been evident. The Vivacell Telecom case underscores the need for comprehensive due diligence and informed decision-making in both political and economic matters.
President Kiir’s administration has repeatedly faced criticism for making decisions driven by emotions rather than rational, evidence-based judgment. This pattern extends beyond the Vivacell case to encompass military decisions, economic policies, and international agreements. It underscores the absence of institutional constraints on the President’s authority, allowing for governance that often appears guided by personal interests and political expediency.
As South Sudan grapples with the political fallout from this contentious decision, it faces significant challenges in rebuilding its international reputation and creating an environment conducive to economic growth and stability. Honouring the financial obligations set by the Swiss Federal Supreme Court is not only a legal necessity but also a critical test of South Sudan’s credibility on the global stage. Failure to comply could result in further isolation and damage to the country’s international reputation.
In conclusion, the Vivacell Telecom case represents a stark collision between the old jungle rule of the SPLM/SPLA era, marked by impulsive and politically motivated decisions, and the international rule of law. President Kiir’s unchecked power has put South Sudan’s democracy at risk, and the ramifications of this case extend beyond the financial burden it places on the nation. South Sudan must now embark on a path of transparency, accountability, and informed decision-making to regain its footing on the global stage and safeguard its liberation legacy.
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