Blue Label, Telkom arbitration ruling
The North Gauteng High Court has set aside an arbitration process between Blue Label Telecoms, Telkom, and its former subsidiary, Multi-Links.
In June 2011, Africa Prepaid Services Nigeria (APSN), a subsidiary of Blue Label, launched
arbitration proceedings against Multi-Links Telecommunications (MLT), for payment of US$457 million (R4.58 billion) arising out of the cancellation of a “super dealer agreement”.
Telkom sold its shareholding in Multi-Links to HIP Oils Topco in October 2011.
Under the agreement, APSN acquired the right to market and distribute a range of products for MLT in Nigeria.
In the arbitration proceedings Multi-Links counter-claimed against Blue Label’s subsidiary for payment of the sum of US$123 million.
Evidence in the arbitration proceedings was due to be presented in November 2012, but was postponed. The arbitration proceedings were due to recommence in February 2014.
In June 2013, Multi-Links launched an application in the High Court in terms of the South African Arbitration Act to set aside the arbitration agreement contained in the Super Dealer Agreement.
APSN launched a counter application for an order declaring that the High Court had no jurisdiction in the action.
On 19 August 2013, the High Court heard argument in relation to the stay application and the jurisdiction application.
And on 6 September 2013 the High Court delivered judgement in terms of which:
- The jurisdiction application was dismissed with costs;
- The stay application was granted with costs;
- Telkom and MLT were ordered to pay APSN´s costs in the attachment application on the attorney and client scale;
- The Court directed that the question of the High Court’s jurisdiction over APSN in the action should be determined by the trial court.
According to Blue Label, APSN is in the process of considering the judgement with a view to deciding whether it should apply for leave to appeal against the dismissal of the jurisdiction application and the grant of the stay application.
“The High Court did not make any determination on the merits of the claims in the arbitration and the action,” Blue Label said in a statement on Monday (9 September).
The group noted that the arbitration proceedings will not continue in February 2014, while APSN will either pursue its claim against Multi-Links in the High Court or in the arbitration proceedings should it pursue and succeed with an appeal against the judgement of the High Court.
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