South Africa: Blue Label Telecoms - Court to mull $528m Telkom claim


Blue Label Telecoms and Telkom are headed to court to resolve a $528 million (R5.3 trillion) claim the latter firm has brought against the former. Blue Label confirmed yesterday that it had lost on Friday when the North Gauteng High Court set aside an arbitration process. It is reviewing options to appeal.

The arbitration was launched by Africa Prepaid Services Nigeria (APSN), a subsidiary of Blue Label, in 2011. APSN sought $457m because Telkom cancelled a super dealer agreement, which required APSN to market and distribute products for Multi-Links, a former Telkom subsidiary in Nigeria, before the 10-year contract expired.

In June Multi-Links lodged an application to set aside the arbitration agreement established when it first contracted APSN in 2008. APSN lodged an application last month for an order stating the South African high court did not have jurisdiction over it, which was dismissed last week. Five others also face Telkom’s claim, according to its 2013 annual report. Shares in Blue Label declined 1.53 percent to close at R8.37 yesterday