Econet saga rumbles on

Johannesburg, 03 Jun 2005

The long-running arbitration dispute between Econet Wireless International (EWI) and Nigerian-based VMobile (formerly Econet Wireless Nigeria) will continue, this time before a Nigerian tribunal.

The quarrel between the organisations had gone before a three-member tribunal of the United Nations` Permanent Court of Arbitration (PCA) in Paris earlier this year, but instead of the expected final decision from the PCA, the court ruled that it had no jurisdiction to make a decision.

The tribunal instead referred the matter to a new panel, which must be appointed by a Nigerian judge, without considering the merits of the case.

The ruling means the long-running shareholder dispute is set to continue before a tribunal in the West African nation.

The two organisations have been involved in a dispute that has been on the go for nearly two years, triggered - according to EWI - by VMobile`s decision to sell a 51% controlling interest in the business to Vodacom SA.

EWI, which set up the Nigerian operation with funding from local investors and which also holds 5% equity in Vee Mobile, claims it had preferential rights to those shares.

"EWI has already started the process of transferring the matter to a new tribunal in Nigeria, and we do not expect it to take long, because the court record is already in place," says a spokesman for EWI.

The decision by the PCA means companies that have been bidding to acquire VMobile will have to wait until the arbitration, which is being done under the auspices of the UN Centre for International Arbitration as prescribed by Nigerian laws, is finally completed.

An injunction issued by the Nigerian Federal High Court in January still prevents the company from selling or transferring shares from a third-party until such time as the dispute is resolved.