Arbitration in Africa
Econet Wireless-Vee Networks
A long fight for justice
Freshfields worked with Econet for eight years to secure a favourable arbitral award over a dispute relating to its stake in Nigerian telco VNL
We advised South Africa-based telecoms provider Econet Wireless in a dispute relating to Vee Network Limited (VNL), Nigeria’s leading mobile company.
Econet owned a 5 per cent stake in VNL and held pre-emption rights under the terms of the shareholders’ agreement. So when they decided to sell a majority stake, Econet believed it had the opportunity to acquire what would have been a major asset in its African portfolio. Instead the stake was sold to Dutch company Celtel, so Econet sought redress through the courts.
Objections, injunctions – and an unexpected death
Our team fought and won an eight-year battle before an international arbitral tribunal to secure compensation for Econet and to protect its rights. Along the way the team had to tackle an array of challenges including objections to jurisdiction, anti-arbitration injunctions, attempts to move assets and multiple challenges to two awards made in Econet’s favour. It took nearly two years to constitute the tribunal and nearly seven to obtain a final award. We also had to respond to the sudden death of Econet’s expert valuation witness just three weeks before the hearing.
The arbitration involved two main hearings in Lagos two years apart, the second of which heard evidence from 11 witnesses and experts and involved closing submissions that ran to nearly 800 pages. When media reports suggested Celtel had instructed VNL to sell off infrastructure assets worth hundreds of millions of dollars, we applied for interim measures to preserve the value of the business.
A test of resolve, spirit and skill
We worked with Nigerian co-counsel to fend off injunctions and other challenges in the Nigerian High Court, Court of Appeal and Supreme Court. The tribunal ultimately issued a final, nine-figure damages award in favour of Econet, plus costs and interest. The case was a test of resolve, spirit and skill, and has been seen by the international business community as a vital test of the independence of Nigeria’s legal system.