Nigerian High Court dismisses Airtel’s application on Econet Wireless case
Telecom Lead Africa: Nigerian High Court has dismissed Bharti Airtel’s application on Econet Wireless case.
In court papers, Econet said that it is submitting a claim valued in excess of $3 billion.
The Lagos High Court on Thursday dismissed an application by Indian telecom operator Airtel to set aside an award made by an international commercial arbitration tribunal in favor of Econet Wireless.
Econet Wireless said the judgment paves the way for the matter to be referred back to the international tribunal to set the quantum of damages and compensation that Bharti must pay to Econet Wireless.
Bharti Airtel officials were not available for comments the issue.
The international tribunal found multiple breaches of a shareholders’ agreement by both the selling shareholders and Celtel Nigeria, now Bharti Airtel Nigeria, ordering them to pay damages/equitable compensation to Econet.
The ruling said that the purchase of a 65 percent stake in Nigeria’s second largest cell phone company, by Celtel, was violated the pre-emption rights of existing shareholder, Econet Wireless. Celtel’s parent company, Zain of Kuwait later sold the controlling stake to Airtel.
Econet Wireless has disputed Airtel’s ownership of one of its Africa operations. Econet disputed the buyout of Airtel’s stake from Zain Nigeria in 2010 because its right of first refusal over the stake was denied, in a dispute that had been ongoing since 2003, when the same assets were first sold to Vee Networks.
According to the first judgment, Econet Wireless of the United Kingdom is a shareholder of Bharti Airtel Nigeria and holds 5 percent of the issued shares of the company. The court ordered Airtel to reinstate the shareholding of EWL.
The court ordered that all actions, and resolutions taken by the company, since October 2003, at which EWL was entitled to be notified, and to participate in, as a shareholder, but was prohibited, are null and void. This includes decisions to sell shares, issue shares, and also transfer shares to third parties.