LIME case leaves a sour taste

28 Sep 2011

Jamaica’s Supreme Court has rejected an application by UK-owned LIME to block the merger of Digicel and Claro. The Cable & Wireless Communication (CWC) subsidiary sought to overturn the acquisition of Mexico-backed Claro by Digicel, claiming that the deal was anti-competitive and would be harmful to the industry. In making his decision, Justice Brian Sykes said that the defendants, the Fair Trade Commission (FTC) and Prime Minister Bruce Golding had not acted unlawfully, having taken into account the needs of consumers and followed the letter of the current Telecommunications Act.

Sykes added that even if LIME’s case had not been overturned, its proposed solution could not be enforced by the court. LIME had sought to compel the FTC to issue an order against the Digicel/Claro deal; however, as the FTC has statutory discretion, the court cannot instruct the watchdog on how to exercise such discretion.

LIME’s lawyers announced that they would be pursuing the matter further, and would appeal against Sykes’ decision. Richard Fraser, Digicel Jamaica’s legal head denounced LIME’s litigation as ‘a cynical attempt to block a deal that is clearly permissible by the law’.

As previously reported by CommsUpdate, in approving the acquisition Golding required that Digicel operate Claro’s network separately and meet the 90% coverage condition of its licence. The prime minister also said that the deal brought into sharp focus deficiencies in the legal framework around the industry, and that his government would be fast-tracking new legislation through parliament to amend the Telecommunications Act.

Jamaica, America Movil Jamaica (Claro), Digicel (Jamaica), LIME Jamaica