Econet wants same arbitrators reappointed

Johannesburg, 23 Jun 2005

Econet Wireless International (EWI) has filed papers in the Nigerian Federal High Court, asking a judge to reappoint the international arbitration panel from the UN Permanent Court of Arbitration (PCA), which initially ruled that it had no jurisdiction in the matter.

The arbitration is part of a long-running dispute between EWI and VMobile (formerly Econet Wireless Nigeria), 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 VMobile, claims it had preferential rights to those shares.

The PCA had been expected to rule on the shareholders` dispute, but the tribunal instead referred the matter to a new panel, which it said must be appointed by a Nigerian judge, without considering the merits of the case.

"Our lawyers have requested the court to consider reappointing the same panel initially appointed by the PCA, which was subsequently found not to have jurisdiction over the case," says a spokesman for EWI.

"This process has been going on now for nearly two years and to avoid further delays we think it will help everyone if the same panel is appointed as they have already heard the substantive matters."

The spokesman says it is unclear how long the process will still take, as the judge has the power to appoint the same panel or to appoint a completely new three-member panel, but EWI believes it may take as long as another year to resolve the issue.

"Given that the issue to be considered by the arbitrators concerns pre-emptive rights, it means no third-party can acquire shares in VMobile until this matter has been resolved," says the spokesman.

The spokesman points out that a high court judge issued an injunction on 10 January ordering VMobile to refrain from taking any measures that would prejudice the rights of EWI.

This is in reference to reports that Virgin Mobile and Vodacom SA have teamed up to try and acquire a majority shareholding in VMobile.