Airtel to move Nigeria's SC after losing $3-mn dispute in Lagos high court
21 February 2014
Bharti Airtel yesterday said it would appeal in Nigeria's Supreme Court after it lost a case in the Lagos High Court last week, potentially facing $3 billion in payouts over a 5-per cent stake claimed by Econet Wireless in its Nigerian unit.
The High Court in Lagos, Nigeria, dismissed Bharti Airtel's appeal to set aside an award made by an international commercial arbitration tribunal in favour of Econet Wireless.
The appeals court, in its judgement on 14 February, said Airtel failed to get the rulings of two lower courts quashed over attempts by Econet Wireless to reacquire its stake in the company.
The judgement 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 Econet Wireless.
In court papers, Econet said that it is submitting a claim valued in excess of $3 billion.
In the extensive judgement, the Lagos High Court found that the international tribunal had been correctly constituted, had jurisdiction and had acted correctly on all accounts.
Bharti, India's largest mobile-phone operator, said it would move Nigeria's Supreme Court against the judgement, which held that Econet Wireless remained a bona fide stakeholder in Airtel Nigeria, a unit of the Indian firm.
"Bharti Airtel, a 79.06 per cent shareholder in Airtel Networks Ltd, Nigeria (Airtel Nigeria) is not satisfied with the judgement of the Court of Appeal, Lagos, delivered on February 14 and will lodge an appeal against that decision at the Supreme Court of Nigeria," Airtel said in a statement Thursday.
Bharti Airtel said the disputed shares are in an escrow account and the judgement would have no impact on the stake of Bharti Airtel or other Airtel Nigeria shareholders.
Airtel Nigeria is part of the African telecom business that Bharti acquired from Zain for about $10.7 billion (See: Bharti Airtel takes control of Zain's Africa operations).
"Airtel Nigeria has already launched an appeal before the Supreme Court of Nigeria against the judgement of the Court of Appeal in Kaduna in the matter relating to Econet's claim for 5 per cent shares in Airtel Nigeria," the statement said.
"We would like to unequivocally state that neither of these orders of the courts of appeals in Lagos and in Kaduna deal with the quantum of damages and no such quantum has been determined."
Nigeria is among Airtel's top African markets, with a 30 per cent share of revenue from the continent in 2012-13.
"Bharti Airtel and Airtel Nigeria have full confidence in the laws of the land, and believe the Supreme Court in Nigeria will determine the appeals on merits. Airtel wishes to assure its customers, employees and business partners that these judgements will in no way affect operations of Airtel Nigeria," it said in the statement.
The dispute dates back to 2003, when Econet said a series of improper decisions taken by Nigerian members of the company resulted in the cancellation of Econet Wireless Ltd's shares in the company, deletion of its name from the register of shareholders and change of name to Vee Mobile Networks.
On 24 January 2012, the federal high court of Nigeria ruled that Econet's shareholding in the company must be reinstated.
The judgement also said the name of the company, now Bharti Airtel Nigeria, should revert to Econet and all decisions in which Econet was entitled to participate as a shareholder but was prevented from doing so, are null and void.