Latest malfeasance

[Paul Hjul]

With some recent developments I think it is apposite to set out - for
prosperity's sake if nothing else - the latest malfeasance from the
individuals controlling Afrinic. The TLDR version is that Mr Eshun
approached the court with a fatally flawed application which was thrown out
and it is very clear that despite repeatedly being encouraged to enter into
good faith dispute resolution that Afrinic (as an organization) continues
to refuse to do so despite the consequences for all resource members.

*A "New Interim Order"*

On Wednesday night I received (via the members mailing list) an email from
Benjamin Eshun (subject line "New Interim Order SC/COM/WRT/000056/2023") which
in essence represents a complaint that the Mauritian Supreme Court has yet
again injuncted the breaking of the law. Based on the history of total
contumen for the courts by some within Afrinic this doesn't surprise me in
the least. So far there have been sensible and intelligent unanswered
questions posed by honest participants and some stupidity from the usual
knaves - including one of the individuals who was integral to an effort to
rig the election of directors in the first place. Of course no answers to
the inevitable questions arising from communications that purports to be
given by the chair of the board (a board that by law does not exist and a
director who assumed the chair in a meeting that was a nullity) is itself
an issue. It is surprising that the order and an intimation of what the
written resolution sought to do was furnished but that a copy of the
impugned written resolution is missing.

The first thing to ask is why has this particular interim order been
published by Afrinic, and why to the members list? Considering how many
legal proceedings and shenanigans attempted are never reported to the
members it seems odd. Moreover the practice of Afrinic updating its case
list (https://afrinic.net/court-cases) hasn't been done since the 18th
November 2022 - clearly there has been considerable activity since that
time. What makes this bit of news more relevant than the other shenanigans?
I think the answer is quite clear. Those individuals who are responsible
for the mess at Afrinic are seeking to blame the courts for the mess, which
they have created. As I've said before, it is perfectly legitimate to
criticize or critique the reasoning of a decision of a court or to opine as
to the merits of a given law within a given jurisdiction (heck I do so in
this email - in my view Mauritius company law tolerates far to
much shenanigans from rogue directors). What is not sensible to do as an
entity within the reach of a given court is to actively seek to undermine
that court's judicial authority. What is also profoundly stupid, is to show
a given court that only through the exercise of coercive orders will the
court secure compliance with its decisions. If you don't want a court to
block your bank accounts don't give indications of an intention to
dissipate your assets.
Of course this email from Eshun was not posted to the community mailing
list and I have doubts that the suppliers, creditors and staff have been
made privy to the admission "due to the lack of an approved operations
budget to pay critical contractual expenses and obligations, we might face
significant challenges that might not allow us to operate within normal
acceptable risk parameters. This may result in a disruption in the
continuity of services and the maintenance of our infrastructure and
datacenters until the determination of the present matter." Nor does the
email explain why an injunction which was issued on the 31st of January is
only now being communicated. Did it really take two weeks to grasp that it
was necessary to accept the terms of this injunction considering that all
that is precluded is acting brazenly unlawfully? Or as appears to be the
case did it take two weeks to decide to oppose an injunction that does
nothing more than prevent the company from circumventing court orders?
No, of course not. We have to understand that it has been hoped that the
malfeasance could simply continue and the members could be bullshitted into
viewing the courts rather than Afrinic malfeasance that is the cause of the
problems. So did something else happen as well? Quite clearly it did.

*Eshun v Afrinic & no others*

On Thursday morning I received a copy of the attached judgment (in unsigned
form, and I am trying to secure a copy of the affidavit presented to court
- for reasons that should become apparent) showing that Mr Eshun brought a
section 136 application (therefore Afrinic is the nominal respondent but
its quite clearly a fiction to gloss over the ex parte nature of the
application) which has been dismissed by the court on the 14th February.
The reference number suggests that this application was launched in 2022,
and quite likely was brought shortly after the IGF meeting in Addis. In my
view this application is nothing short of a fraud on the court (and I
submit that the court adopted a similarly averse view based on the fact
that the application was dismissed) particularly by having an applicant and
respondent in a collusive position while failing to give notice to affected
and interested parties. Unlike the previous time, when an attempt to play
truant by relying on s136 occured (Eddy Kayihura v AFRINIC
SC/COM/MOT/000500/2022), this effort did not come into my knowledge and so
no intervention from Crystal Web took place. Had either the purported
"written resolution of the directors" from January 2023 or the application
SC/COM/MOT/000882/2022 come to my attention and no other party had stepped
in to prevent an abuse of process or flagrant attempt at acting illegally
then instructions for Crystal Web to approach the courts would have been
given. However it is clear that Larus Cloud Service was well positioned on
the 31st January and so did act by securing an injunction. I have no idea
how the "resolution" came to be known by Larus but it is probable that some
effort to give effect to it arose leading to the document coming to be
known. Larus can't have a spy on the board of Afrinic because Afrinic has
no board.
On the assumption that SC/COM/MOT/000882/2022 was filed in December 2022
then the question must be asked whether the actions on the 17th of January
(which Eshun has admitted to in his email) was in direct and flagrant
disrespect of the process brought before the court in the previous
December. However these issues only scratch the surface.

It is worth stating what a s136 application is: Section 136 of the
Companies Act (2001) of Mauritius provides for the court to appoint
directors in fairly restricted circumstances:

136. Court may appoint directors
(1) Where -
(a) there are no directors of a company, or the number of directors is
less than the quorum required for a meeting of the Board; and
(b) it is not possible or practicable to appoint directors in accordance
with the company’s constitution or under section 140(3),
a shareholder or creditor of the company may apply to the Court to appoint
one or more
persons as directors of the company, and the Court may make an appointment
if it
considers that it is in the interests of the company to do so.
(2) An appointment shall be made on such terms and conditions as the Court
thinks fit.

Of importance is the "and" between 1(a) and 1(b). It is "and" not "or".
Thus the court will not under this section appoint directors if there is a
quorum. Moreover the fact that quorum is not present in the Board is a
necessary but not sufficient condition for the invocation of this section.
A company can - and in the case of Afrinic ought to - have provisions in
the companies constitution that automatically convene a stakeholders
meeting or the like. As a side note section 140(3) finds no application as
it relates to companies where there can be a single director. As of June
last year the condition in 1(a) was clearly met - and in fact from the time
the injunction against an illegitimate election was granted that condition
was clearly going to arise - and the proper way to ready the ship is
through an SGMM. Something called for and something which the board prior
to becoming inquorate and ceasing to by law exist emphatically (and in
wanton dereliction of fiduciary duty) refused to undertake. However nothing
has changed since the day after the AGMM and whenever in December Eshun
brought his application. While s136 is a statutory provision the courts
discretion is likely to follow equity which will not aid the indolent. My
suspicion is that Eshun's hopes of forcing the government of Mauritius to
capitulate were dashed in Ethiopia and that as a result this latest gambit
was embarked on. But this is no more than a suspicion grounded in what I've
observed. Of course this would mean that Eshun has actively opposed a
course of action of bringing about a resolution of the deadlock only to
rely on its existence once other schemes of illegality failed. It is
unclear from the judgment whether Eshun disclosed the fact that at the time
of bringing the application he knew of at least two other applications
brought in terms of section 136. It is therefore not clear whether he so
much as attempts to offer an account as to why notice is not given to those
parties to a section 136 application. It is probable that only the
narrative of blaming the injunctions against Afrinic for its state of
affairs were lead in the papers and that this was sufficient for the court
to realize that parties ought to have been given notice of any effort to
have directors appointed.

*IT ALL BOILS DOWN TO THE ESSENTIAL FACTS*

On the facts of this matter, it is only "not possible or practicable" to
appoint directors using Afrinic's proper processes because of a refusal to
use the mechanism of a special general members meeting to  bring an end to
Afrinic's governance crisis. *This problem is grounded in the holding by
certain individuals associated with Afrinic that Afrinic is not first and
foremost an organization accountable to and established for its members*.
Therefore it is, in my view, only appropriate to appoint directors using
the 136 provision for the purpose of organizing and convening a special
general members meeting. While I'd prefer it if section 118 (which deals
with the court convening a meeting of shareholders) was broader and the
default course of action I have been advised (and the judgment points to)
that the practice and proposition in Mauritius is that the approach of the
company acting through its directors aligns with having directors appointed
for the purpose of convening a members meeting.
This is why despite my misgivings about the way 136 works Crystal Web has
in regular order brought a 136 application with prayers to limit the
appointments to the objective of calling an SGMM.

I know of three s136 applications for the appointment of directors. Of the
three only one has not been brought clandestinely, the same one that is not
clandestine is being opposed by Afrinic and is the only one which would
cause a special general members meeting to be called expeditiously.
The other two both preclude the holding of a special members meeting. The
one hands over control to persons chosen by the ATU (including individuals
facing criminal charges relating to corruption) and the other seeks to
cause the court to ignore its own interdict on the holding of an election
tainted by malfeasance.
Had a director of Afrinic approached the parties and disclosed to all
members a proposal to bring to the court an application in terms of section
118 or 136 for an appropriate order, it would have been a discharge of that
person's duties as a director. In fact if a director had properly served
and in an open and transparent manner brought a 136 application setting
forth the proper factual matrix and limited that appointment to the purpose
of calling an SGMM and organizing a legitimate election, then even if there
was opposition the court would have quite likely granted such an order.
The fact is that directors of Afrinic have now twice attempted to thwart
the rights of resource members. This thwarting through fatally flawed and
deceptively brought section 136 applications is deplorable. In my own view
a weakness of Mauritian company practice is that there is not a general
section in statute dealing with a company that is in a governance crisis
requiring the court to convene a shareholders meeting and structuring a
course to restore a state in which the company adheres to its own governing
instruments. What is clear from the judgment (attached) is that the goal of
the application was to circumvent and undermine what the court aptly
describes as "corporate democracy" which "demands that the rights of all
members of a company should be catered for". But it gets worse.

*Some brazen lies revealed in the judgment*

As the facts emerge - particularly once I have sight of the underlying
affidavit - a decision as to whether to take issue with the clear acts of
contempt and dishonesty (including possible acts of perjury) will need to
be made. As with the Kayihura papers the degree of offensiveness and
vexatiousness aren't the metric to use. Rather whether a known untrue
statement is presented on oath with a material effect of undermining the
administration of justice.
As a simple example, the judgment states "the respondent’s Audited
Financial Statements for the year 31 December 2021 have been adopted". This
simply not true. The members rejected the adoption of the financial
statements. I will be writing to BDO (again) informing them of this issue.
It is (or at least should be) professionally embarrassing for auditors to
not only have their statements fail to be adopted by the members of a
company but to then have this fact being covered up in legal proceedings
(the cover up is worse than the crime). If the affiant with a view to
obstructing justice had made this demonstrable falsehood then steps must be
taken.
Similarly the court conveys that it was told that Crystal Web has acted
despite being aware of a to be convened special meeting. Crystal Web has
explicitly sought an SGMM at all times. It has been the refusal of the
remaining directors to cause an SGMM to be called and the general contumen
shown by amongst others the in-house legal officers of Afrinic which has
made it absolutely necessary to secure judicial intervention. Therefore if
an affiant knowing it to be an untrue averment that convening a special
meeting was in the pipeline made this statement then it will be necessary
to take further steps. Of course no explanation for not convening an SGMM
in the last 7 months is given.
And of course it gets worse ... But perhaps going into the rabbit hole of
lying, misusing Afrinic funds and being contemptuous of the courts is an
email for another day.

*Empty and dangerous bad faith threats about service disruption*

So let us look at the implicit threat of service disruption. How is it any
worse now than 6 months ago?
The "present matter" could have been resolved 18 months ago. It should
never have occurred that a malfeasant nomcom was assembled. And, then when
an injunction on the election was ordered the course to immediately
remedying and ensuring a legitimate election was what needed to be done. It
has been recalcitrance from Eshun and the management of Afrinic that has
dragged the matter to the present point. The courts have stepped in to
prevent illegality and have refused to condone illegality because the
recalcitrant makes life difficult after being stopped from acting
illegally. The best analogy here is that Afrinic is behaving like a 3 year
old who was hitting another child. On being put into a time out box they
start hitting themself, and are crying that it is mommy's fault for not
allowing them to hit other children. I wouldn't let the child go and hit
other children and I doubt the court will either.

Hopefully members of staff will seek legal advice and will take action to
prevent the destruction of their rights. Of course a logical step would be
restraints on Afrinic's banking accounts and liquidation proceedings. As
I've said before resource members ought not to favour the liquidation of
Afrinic but I fear that unless the delinquency and recalcitrance is dealt
with shortly that is what is inevitably going to occur. I have little
knowledge of the practicability of doing so but it may be worth staff
exploring an action against the firms who provided professional assistance
to Afrinic such as to thwart the legitimate rights and interests of
employees

*Good Faith Dispute Resolution*

As for the final paragraph of the very well reasoned judgment of the court:
" The Court, however, does recognise the importance of having an operative
board and in that regard, it urges the parties to see to it through their
respective legal advisers that the injunction cases are put into shape at
the earliest possible so that these cases can be heard expeditiously
especially given that the Court has been apprised by learned Counsel
appearing for the respondent that mediation has not been reached in those
cases."
I can only reiterate the fact that Crystal Web is ready to proceed and to
engage in whatever good faith mediation processes Afrinic is availed to
adhere to. While I cannot speak for any of the other companies who have
been compelled by the malfeasance of certain influencers and directors (and
former directors) of Afrinic to be in litigation I can emphatically state
that Crystal Web's objectives are very simple (and was stated publicly on
the 27 November 2021):

For what it is worth as the member Crystal Web we are in full support of
the organization opposing (resisting is the wrong word) an action for the
winding up of the organization on the basis that such a winding up is not
in the interests of the members and would result in disruption to the
global Internet. As Crystal Web we are in full support of the organization
entering into credible dispute resolution processes with any person
(whether a member or not) who has brought proceedings as against the
organization before any court of law and to make a determination as to the
basis upon which to settle any such action in accordance with sound legal
and commercial principles and not in accordance with ideological or
emotional preferences of whoever happens to be on the Board at the time.
When suits that are vexatious or unmeritous are brought, we have full
confidence that due and proper legal processes will address the matter and
insist that the organization at all times act expeditiously in litigation
to bring about just outcomes. As Crystal Web we are opposed to the
organization engaging in tactics in litigation that serves to stall or
embark on costly gamemanship in distraction of a just and proper resolution
of the true underlying dispute.
As Crystal Web we wish for the organization to adhere to its own by-laws
except where it is credibly established on independent advice of counsel
(having a right of audience before the Supreme Court of Mauritiu), which
advise needs to be circulated with members that the by-law is in conflict
with the laws of Mauritius. As Crystal Web we insist that the organization
show proper respect and regard for the Supreme Court of Mauritius and that
it avoid acting in a manner that could even be reasonably perceived as
demonstrating contumen towards the courts. We insist that the laws of
Mauritius and the principles of natural justice permeate all activity of
the organization. As Crystal Web we insist that the organization treat its
members fairly and in a spirit of cooperation, we are therefore gravely
opposed to the attitude shown by in-house counsel for Afrinic in inviting
litigation before exhausting reasonable engagements that do not put the
organization at peril.
As Crystal Web we wish that the organization would focus its efforts on
holding accountable those persons found credibly to have engaged in
fraudulent activity. We are opposed to the conflating legitimate commercial
activity which may be disliked by certain factions with criminal activity
and find it wholly unacceptable for the organization to make such
conflation in a manner that exposes the organization to risk.


*Holding an SGMM*

The holding of a special general members meeting and having a legitimate
nominations process untainted by the dirty hands of Ernest Byaruhanga's
accomplices is the only way to get progress in the organization. What is
unfortunate is that rather than doing the right thing certain individuals
using Afrinic's resources are obstructing getting to a special general
members meeting or legitimate election - for them it is better to destroy
than to adhere to a rule based system of commercial interactions.. Based on
the high reputation which counsel for the applicant has, I can only
conclude that material information was withheld from counsel in the hope of
keeping the facts away from the court. This is a profoundly stupid thing to
do but I am long past being surprised at the depths of stupidity which the
rogues and knaves at Afrinic will plunge.

Hopefully the latest malfeasance will show to enough people (who've been
duped into tolerating Afrinic's (i) contempt for the courts, (ii) disregard
for resource members and (iii) flagrant malfeasance) that tolerating
contempt disregard and malfeasance only encourages it.


Paul Hjul
(speaking in my personal capacity and as the managing director of the
resource member Crystal Web)
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