Econet Wireless has announced in a press release on its website that the High Court in Lagos has dismissed an application by Bharti Airtel which sought to set aside an award made by an international commercial arbitration tribunal in favour of Econet Wireless. The judgement paves the way for the matter to be referred back to the international tribunal to set the amount of damages and compensation that Bharti must pay to Econet Wireless. The Indian telecoms operator inherited the ongoing legal case as part of its USD9 billion acquisition of Zain’s Africa operations in June 2010, including 65% of Zain Nigeria (since rebranded Airtel Nigeria). Econet was a founding shareholder in Airtel Nigeria when the cellco was established as Econet Wireless Nigeria (EWN) in 2001, and claims its 5% stake was cancelled following a takeover by Vodacom of South Africa in 2003. EWN was subsequently renamed Vee Networks and its brand name changed to reflect its new South African owner, but Vodacom pulled out of its contract soon after, citing ‘irregularities’ in the payment of the brokerage fees. Celtel International, a division of Kuwaiti firm Zain, then purchased 65% of the company in May 2006, a move Econet Wireless said violated its pre-emption rights. Then, in 2009 Econet Wireless started moves to block the sale of Zain’s interests in Nigeria to Bharti Airtel until a ruling on the dispute over ownership of the company was issued, but the takeover by the Indian firm was concluded in June 2010.
Earlier this year an international tribunal ordered Bharti to pay compensation to Econet Wireless, after the Federal High Court of Nigeria reinstated Econet’s 5% shareholding in Airtel Nigeria, claiming that the stake was unfairly cancelled, thus rendering any decision made since then without Econet null and void. In its judgement, the Lagos High Court found that the international tribunal had been correctly constituted, had jurisdiction and had acted correctly on all accounts. Econet Wireless is submitting a claim to the tribunal for equitable compensation and damages of USD3.1 billion.