Yesterday, Econet Wireless International sent out a press statement announcing the dismissal by the High Court in Nigeria of an application by Bharti Airtel to block an International Commercial Tribunal from quantifying compensation and damages owed to Econet. Airtel, an Indian telecommunications group, was seeking to prevent an assessment of the “quantum of damages and equitable compensation” that they must pay to Econet for the violation of its shareholder rights.
The matter stems from 2003 when Econet, then with 5% shareholding, attempted to resist a takeover bid of Econet Wireless Nigeria (EWN) by Vodacom. The sale to Vodacom however went through but Vodacom pulled out after citing irregularities in the takeover process. EWN was renamed V-Mobile and eventually a 65% stake sold to Celtel, a division of Zain in 2006. Econet disputed the sale arguing that its pre-emption rights had been breached. The matter was pursued in the Nigerian courts in a bid by Econet to overturn the sale. In 2010, Zain sold its African mobile operations – including Nigeria – to Bharti Airtel for $10.7 billion. Again, Econet sought to overturn this sale.
In December last year an International Tribunal comprised lawyers from Nigeria and the UK, found that there had been multiple breaches of the shareholders agreement when Zain acquired 65% of the shares in the company in 2006. The Tribunal ordered Airtel to pay damages and equitable compensation to Econet. Airtel then sought to block this through an application made to the High Court in April this year.
According to the statement from Econet, the dismissal clears the way for the matter to be referred back to the international tribunal. Econet Wireless said that its experts believe the compensation and damages amount to more than US$3bn.
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