Emma Okonji, with agency reports
A Lagos High Court Thursday dismissed an application by Bharti Airtel to set aside an award made by an international commercial arbitration tribunal in favour of Econet Wireless.
The judgment may have paved the way for the matter to be referred back to the international tribunal to set the quantum of damages and compensation that Bharti must pay to Econet Wireless.
In the court papers, Econet said it is submitting a claim valued in excess of $3 billion.
The international tribunal (comprising senior Nigerian and English lawyers) found multiple breaches of a shareholders’ agreement by both the selling shareholders and Celtel Nigeria, now Bharti Airtel Nigeria, ordering them to pay damages/equitable compensation to Econet (in an amount to be determined in a further round of the arbitration).
The ruling said that the purchase of a 65 per cent shareholding in Nigeria’s second largest cell phone company, by Celtel, was violated the pre-emption rights of existing shareholder, Econet Wireless.
Celtel’s parent company, Zain of Kuwait later sold the controlling stake to Bharti Airtel, the Indian telecoms operator.
The international tribunal’s award was handed down in December last year.
In an extensive judgment, the Lagos High Court found that the international tribunal had been correctly constituted, had jurisdiction and acted correctly on all accounts.
It would be recalled that a Federal High Court had ordered Bharti Airtel, to revert to its former name, Econet Wireless Limited.
The court also ordered the Bharti Airtel to reinstate Econet Wireless’s five per cent shareholding in Airtel Nigeria.
Econet Wireless, an early investor in the company, is an international company domiciled in the United Kingdom.
The company had opposed Zain’s decision to sell the Nigerian business to Bharti Airtel, claiming its right of first refusal.
Zain, however, went ahead to sell its African mobile business including Nigeria to Bharti in 2010 for $10.7 billion.
According to the summary of the judgment delivered by the Justice Mohammed Shuaib, Econet is a shareholder of Bharti Airtel Nigeria Limited and holds five per cent of the issued shares of the company.
The court, therefore, ordered that all actions, and resolutions taken by the company, since October 2003, at which Econet was entitled to be notified, and to participate in, as a shareholder, but was prohibited, were null and void.
This, according to the court, includes decisions to sell shares, issue shares and transfer shares to third parties.
The court also ordered the Corporate Affairs Commission to cancel any certificate previously issued for the company’s change of the name of the company and restore its name to Econet Wireless Nigeria Limited.