Econet Wireless arbitration to go ahead

Johannesburg, 01 Dec 2003

An attempt by Econet Wireless Nigeria (EWN) to have the arbitration process between itself and SA-based shareholder Econet Wireless International (EWI) stopped has been rejected by the UN Permanent Court of Arbitration (PCA).

The dispute between the companies 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.

According to Strive Masiyiwa, CEO of EWI, his company had an agreement with the EWN shareholders that stated that EWI would purchase the $150 million worth of equity that was available, but that this agreement was broken when they chose to accept Vodacom`s deal.

EWI wants the judicial tribunal, if it finds in it favour, to reverse all decisions that have been taken to try to bring Vodacom into the company as a shareholder.

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

Once the 60-day period had expired without a panel being appointed, EWI exercised its legal right to refer the matter to the PCA.

In a letter dated 1 December 2003, the PCA states that it will not rescind its decision to designate the International Chamber of Commerce (ICC), at the International Court of Arbitration based in Paris, as the new appointing authority in this matter.

It also advised the Nigerian company to present any issues it has before the arbitral tribunal, which will shortly be constituted by the ICC.

"We are naturally pleased that the PCA has declined EWN`s request and thrown out the latest attempt by them to try and prevent a transparent legal process from going forward," says Kevin Kachidza, a spokesman for EWI.

"Today`s development is consistent with our expectations and with international law, and we believe that we are beginning to see some semblance of an end to this whole affair," states Kachidza.