Stricken Essar ordered to pay Airtel KES474m in site-sharing debt

2 Oct 2012

A commercial court judge has ordered Essar Telkom Kenya (yu) to pay rival operator Airtel Kenya a lease debt of KES474 million (USD5.5 million), pending the resolution of a site-sharing contract by an arbitrator. According to Business Daily Africa, the dispute first arose after Airtel took Essar to court for non-payment of the leasing fees, only to see its rival raise a counter claim of KES2 billion, on the grounds that base station failures had hampered its operations. In light of the ongoing dispute, the judge took steps to restrain Bharti Airtel from switching off or tampering with Essar’s equipment at its sites until the dispute between the two Indian-owned companies is determined by the arbitrator. Essar was also ordered to continue meeting future lease obligations of the Site Leasing Agreement (SLA) the duo inked in 2009.

In 2009 Airtel Kenya leased some 300 cell sites to Essar for the installation of its equipment and was expected to be paid KES900 million in annual rental charges, which was to be paid quarterly in advance for the duration of the lease. Bharti’s director of legal affairs Alice King’ori confirmed that Essar had been in default since September last year but acknowledged that the firm had paid KES85 million last July, after having filed its counter-suit against Airtel.

Kenya, Airtel Kenya, Essar Telecom Kenya (yu)