The Lagos High Court has rejected an urgent application brought before it by the Lagos State government, a significant shareholder in Econet Wireless Nigeria (EWN), to try and stop the Permanent Court of Arbitration (PCA) from proceeding with resolving EWN’s dispute with Johannesburg-based Econet Wireless International (EWI).

The arguments presented by the Lagos State government were identical to those already filed before the PCA by EWN on two occasions. They brought the matter before the Lagos High Court seeking an injunction to stop the process begun by the PCA, and sought to have the matter returned to the jurisdiction of the Nigerian courts. Lagos State argued the Permanent Court of Arbitration should stop the process they have already started and bring the matter back to a Nigerian court, as the former did not have the competence to preside over the dispute. They further submitted that EWI should be restrained from proceeding with the case outside of a Nigerian court.

In dismissing the application, Justice Adebiyi of the Lagos High Court ruled that she could not grant the injunctive relief sought by the Lagos State in their ex-parte application, and ordered them to proceed and file a proper Notice of Motion. A spokesperson for EWI, Kevin Kachidza, said because Lagos State government had presented an ex-parte application, EWI did not hear about the matter until after the judge had issued the ruling. "We were only notified after they had gone before the judge and failed in their application," Kachidza said.

"This is the third time in almost as many weeks that EWN have tried unsuccessfully to stop the international arbitration to go ahead.

"We are quite amazed by these frantic efforts to stop the process from taking place outside Nigeria. Surely all parties to the dispute should be deriving comfort from the fact that the PCA, with its international reputation for fairness and efficiency, is handling the dispute."

The PCA appointed the International Court of Arbitration (ICA) in Paris to oversee the case, and the ICA is already in the process of appointing arbiters.

In August 2003, EWI wrote to Justice Rosemary Ukeje, the Chief Judge of the Nigerian Federal High Court requesting her, in her administrative capacity, to appoint a panel of arbiters to resolve the dispute among the parties in accordance with the EWN shareholders’ Agreement.

EWI also filed an urgent application before the Chief Judge, seeking injunctive relief and an order restraining the shareholders of EWN from proceeding with issuing shares to Vodacom. EWI argues that it has pre-emptive rights, which were being violated by the actions of the shareholders, pending arbitration.

Almost three and half months later, and after more than 10 court sessions on the matter, the Chief Judge has still not ruled on whether or not she has the jurisdiction to preside over the case. As a result, EWI invoked a provision in the shareholders’ agreement, which entitled them to approach the PCA if the Chief Judge either refused or failed to appoint arbiters upon expiry of 60 days from date of filing their initial application.

"To date, EWN, its shareholders and Vodacom have ignored the existence of the legal processes that are before the Nigerian courts, and have taken advantage of continuous adjournments of the cases to proceed with their plans," Kachidza said. "EWI is confident that no-one, particularly Vodacom’s foreign shareholders who include Vodafone, SBC and Telkom South Africa, will be able to ignore the ruling of the PCA. Indeed these frantic appeals are designed to create a fait accompli whereby Vodacom is allowed to come in before the matter is finally heard by the Nigerian courts. This is a very hazardous game which will cost EWN and Vodacom dearly in the end. It is important to let the international court do their job, and give a final ruling in this matter," Kachidza said. Meanwhile, a separate court in Lagos began on Tuesday to hear an application filed by EWI against South African cell phone operator Vodacom for inducement of breach of contract, as part of the increasingly convoluted EWN imbroglio.

Financial Gazette