JSE-listed prepaid voucher supplier Blue Label Telecoms will meet with former Telkom subsidiary Multi-Links later this year for arbitration.
A Blue Label affiliate is claiming $481 million - or almost R4 billion - from Multi-Links after it cancelled a contract early. Multi-Links is defending the suit and has lodged a counter-claim worth $123 million - about R1 billion.
The arbitration will take place in SA, between 4 November and 15 December.
African Prepaid Services Nigeria (APSN), in which local firm Blue Label Telecom has a 36.7% stake, is claiming the damages for lost profit, because a dealer agreement was cancelled early in November 2010, after Telkom said it was looking at exiting the struggling CDMA business in Nigeria.
APSN had a “super dealer agreement” with Multi-Links, which allowed it to acquire customers for Multi-Links' CDMA network, as well as sell and market the range of Multi-Links' CDMA service and products for an exclusive 10-year period until December 2018.
Telkom sold Multi-Links last October for R68 million, but has guaranteed to accept liability for certain litigation claims against the Nigerian unit if the claims come in at more than $10 million, or about R83 million.
Blue Label has exited Nigeria, but still has a stake in APSN, which continues to exist while arbitration is pending. Its share of the losses for the year to May came to R5.5 million, due to winding down the operation.
Multi-Links defended its decision to cancel its contract, saying in 2010 there were a number of contractual breaches by APSN.
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