ECONET wireless maintains that its stakes were unfairly cancelled when Zain took over in 2005
The controversy over the ownership of one of Nigeria’s mobile telephone companies, Airtel Nigeria, continued on Thursday as the Federal High Court in Lagos dismissed an application by Bharti Airtel, an Indian telecommunications group, and others, seeking to set aside an international commercial arbitration tribunal ruling that favoured Econet Wireless.
Econet Wireless, which controls five per cent equity shareholding in Econet Wireless Nigeria Limited, had last January 30, challenged in court the ownership structure of Bharti Airtel Nigeria. Econet claimed its stake was unfairly cancelled when Zain Nigeria took control in 2005, without giving it the right of first refusal over the stake.
In its application, Econet Wireless sought claims of about $3.1 billion in damages and the reversal of the company’s name from Bharti Airtel Nigeria on grounds that the change was irregular, null, void and of no effect.
In May, a judge of the Federal High Court, Lagos, Mohammed Shuaibu, dismissed Bharti Airtel’s application for a stay of execution of an earlier decision by the Court in favour of Econet Wireless. Bharti had sought the stay of execution of the judgment to prevent Econet Wireless from enforcing its rights pending Bharti’s appeal of a landmark ruling handed down in January 2012.
An International Tribunal set up under the auspices of the United Nations Commission for International Trade Law, UNCITRAL, had last December found that there were multiple breaches of the shareholders agreement when Celtel Nigeria (now Bharti Airtel) acquired control of 65 per cent of the shares in the company.
But, Thursday’s judgment, dismissing the application, paves the way for the matter to be referred back to the international arbitration tribunal for settlement of the quantum of damages and compensation that Bharti/Airtel must pay to Econet Wireless.
In the ruling, the court found that the International Tribunal was properly constituted, and had jurisdiction to act on all accounts over the matter