A five year long civil suit against Tongasat (Friendly Islands Satellite Communications) came to a close on Monday 24 September when the Tonga Supreme Court read out nine declarations, stating that the Tonga Government made unlawful payments of over USD $45 million to Tongasat in 2008 and 2011. 

However, the Tonga Supreme Court dismissed financial claims against Tongasat. The ruling stated: “The plaintiffs lack standing to pursue their restitutionary private law claims against Tongasat and those claims are dismissed”

Indemnity for court costs were awarded to the two plaintiffs, the Public Service Association Inc (PSA) and the current Prime Minister Hon. ‘Akilisi Pohiva.

The Supreme Court noted that Tongasat applied for costs against its fellow defendant the Kingdom of Tonga (Tonga Government), including indemnity from court costs. The outcome of this application awaits to be determined.

In his ruling, Hon. Chief Justice Paulsen read out the following nine declarations:

1.   The first tranche payment of USD$24.45 million in aid grant funds received by the first defendant (the Kingdom) from the People's Republic of China on 4 September 2008 (the first tranche payment) was a "grant" and accordingly "public money" within the meaning of the Public Finance Management Act ("PFMA");

2. The payment of USD$20,985,667 of the first tranche payment to or for the benefit of the second defendant (Tongasat) was expended in breach of section 9 of the PFMA and accordingly unlawful and invalid;

3. Furthermore, to the extent that the first tranche payment was expended to satisfy preexisting liabilities of Tongasat that expenditure was in breach of section 30 of the PFMA and accordingly unlawful and invalid;

4. The second tranche payment of USD$25.45 million in aid grant funds received by the Kingdom from the People's Republic of China on 9 June 2011 (the second tranche payment) was a "grant" and accordingly "public money" within the meaning of the PFMA;

5. The payment of the second tranche payment in its entirety to or for the benefit of Tongasat was expended in breach of section 9 of the PFMA and accordingly unlawful and invalid;

6. Furthermore, to the extent that the second tranche payment was expended to satisfy preexisting liabilities of Tongasat that expenditure was in breach of section 30 of the PFMA and accordingly unlawful and invalid;

7. The plaintiffs lack standing to pursue their restitutionary private law claims against Tongasat and those claims are dismissed;

8. The plaintiffs are entitled to the costs of the action against both defendants, with costs to be fixed by the Registrar if not agreed; and

9. Tongasat's application for an indemnity from the Kingdom for costs awarded to the plaintiffs and its own costs of defending this action are reserved.