A 12-year dealer arrangement between Brilliant Cellular and MTN has come to an end, because Brilliant Cellular breached the contract by selling competitors' airtime.
Brilliant Cellular, which had six branches and 21 staff members, recently lost its bid in the South Gauteng High Court to prevent MTN from cancelling a dealer agreement with it, and was ordered to pay costs.
The case, initially set to be heard as an urgent application on 1 November, was held over until later that month. The decision has only just become available.
Acting Judge Laurance Hodes found that Brilliant Cellular had breached its agreement with MTN, and that the company no longer intended to be bound by the deal with MTN. He dismissed Brilliant Cellular's bid to stop MTN from cancelling the contract.
The issue dates back to September last year, when MTN inked a new dealer agreement with Brilliant Cellular. According to the agreement, Brilliant Cellular could only retail MTN items in its outlets and benefited from the cellular company's branding.
However, MTN argued that the dealer breached the deal by selling competitors' stock, which it uncovered through mystery shopper visits to two of its branches. In addition, argued MTN, the dealer was not using authorised point-of-sale equipment.
As a result, MTN initiated a process to cancel the deal with effect from 5 November, and close down Brilliant Cellular's stores.
Brilliant Cellular hit back, arguing that it had sorted out the problem, which was caused by uninformed staff members, and a sales terminal that should have only been activated to sell MTN stock, but inadvertently also could be used to buy Cell C and Vodacom airtime.
The dealer also argued that MTN's point-of-sale equipment was not effective enough, which led to it using unauthorised equipment.
Sole member of Brilliant Cellular Mark Olivier said during a meeting between the parties that MTN should buy out the entity, as trust had broken down. He argued that the matter had become personal and that MTN wanted to force him out of business.
MTN's national franchise manager Jody Forrester denied that this was the case, and argued that there had been a fundamental breakdown of trust between the applicant and the respondent because of Brilliant Cellular's conduct.
MTN walked out of the meeting, but informed the dealer the cancellation stood. As a result, Brilliant Cellular then took MTN to court in a bid to stop it from canning the deal.
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