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Telkom to pay USD80 million to settle nine-year dispute

16 Jul 2010

Telkom, South Africa’s largest fixed line operator by subscribers, has announced that it will pay USD80 million to settle a nine-year old legal dispute with US firm Telcordia Technologies. The 2001 wrangle involves the supply and installation of a customer management system, which Telkom insisted did not match up to specifications – claiming breach of contract.

In 2000 Telkom terminated its agreement with Telcordia, alleging that the US company had not provided the product to the agreed specifications. In 2001 Telcordia set in motion an arbitration process with the International Chamber of Commerce. In 2005 the Supreme Court of Appeal (SCA) ruled in favour of Telcordia, but the matter was subsequently taken to further arbitration. A Telkom spokesman commented: ‘This settlement follows on from lengthy arbitration proceedings, during the course of which two partial awards were made by the arbitrator’. Previous indications suggested that the telco could have been liable for a fine of as much as USD1.5 billion.

South Africa, Telkom South Africa

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