Econet dispute goes to the United Nations

Johannesburg, 31 Oct 2003

Econet Wireless International`s (EWI) dispute with its fellow shareholders in Econet Wireless Nigeria (EWN) has seen the case for arbitration referred to the United Nations Commission on International Trade Law (UNCITRAL).

The dispute arose after the EWN shareholders accepted an offer from Vodacom to purchase equity in the company, despite EWI apparently having first option on the equity.

"We had an agreement with the other EWN shareholders, signed on 27 May this year, which stated that we would purchase the $150 million worth of equity that was available, but as far as we are concerned, this agreement was broken when they chose to accept Vodacom`s deal," says Strive Masiyiwa, CEO of EWI.

"In a case of dispute between the shareholders of EWN, the shareholder rules state that the case must go to arbitration, under the auspices of UNCITRAL."

He says that the request for arbitration was originally presented to the Nigerian High Court back in June 2003, after which the court had 60 days to appoint an arbitration panel.

"Obviously we monitored the situation closely and the moment the 60-day period had expired - which occurred on 27 October - without a panel being appointed, EWI exercised its legal right to refer the matter to UNCITRAL in The Hague," he says.

"We are hoping that a judgement will be handed down by the end of November, although at the latest we certainly expect to have a result before Christmas."

He believes that the arbitration panel will hand down a judgement favourable to EWI, which will see the company allotted the shares it believes it is due, and given a set time period in which to pay the $150 million it would owe for them.

"The judgement of the arbitration panel cannot be appealed against and its decision is binding on all parties," states Masiyiwa.