Update On The Arbitration Award Against MTN Communications Nigeria Ltd In Favour Of Private Networks Nigeria Ltd

PRESS RELEASE

We are by this medium giving the business partners, suppliers, bankers and other stakeholders of Private Networks Nigeria Ltd. (PNN) an update on the status of the Final Award delivered by the Honourable Justice D.F. Akinsanya (Rtd) on the 20^th day of April, 2011, so the said parties will not be in the dark over the continuous efforts of MTN to frustrate the efforts of PNN to recover the amounts due to all stakeholders in the Site Integrated Maintenance Service contract between PNN and MTN.

• After      the Final Award was delivered on the 20^th of April, 2011, PNN      wrote a letter dated 29 April 2011, requesting for the payment of the award      sum, which was divided into two parts, i.e., (1) N256,227,881.12, which      was admitted by MTN (with 21% interest); and (2) N652,410,123.52, which was the amount calculated by PNN on      the excess diesel.

• When PNN did not receive any response from MTN between April 29 and June 1, 2011, PNN registered the award at the High Court of Lagos State and obtained a garnishee Order Nisi against MTN’s account in 11 commercial banks, namely: Access Bank Plc, Diamond Bank Plc, Guaranty Trust Bank Plc, United Bank For Africa Plc, First Bank of Nigeria Plc, Standard Chartered Bank Plc, Zenith Bank Plc, Intercontinental Bank Plc, Fidelity Bank Plc, Stanbic IBTC Bank Plc, and Bank PHB Plc.

• MTN went on to file an Originating Motion to set aside the Final Award of the arbitrator. MTN also filed a Motion on Notice to set aside the garnishee order nisi. The Honourable Court discharged 10 of the 11 banks after GTB informed the court that it was willing to bear the burden of the garnishee order. Since then MTN has continued filing several applications to delay the proceedings at the High Court and the inevitable payment of its indebtedness.

• The trial judge directed both PNN and MTN to calculate the cost of excess diesel supplied on each of the wrongfully classified sites of MTN. When the parties met to do the calculation, MTN deliberately disagreed with a simple calculation, based on unfounded technicalities. The trial judge directed either of the two parties to apply for a remission of the case back to the arbitrator. When PNN brought the application, MTN still filed an objection to the application, asking the court to refuse to remit the case back to the arbitrator.

• One wonders why MTN is approbating and reprobating at the same time. They do not want to agree on the outstanding amount and the do not want to go back to the Sole Arbitrator whom they appointed to determine the amount once and for all and put an end to the delays.

• The matter is still pending at the High Court of Lagos State for Ruling on the various applications before the Court.

• The total amount due from MTN to be paid to PNN (and about 56 suppliers) as at 29 February, 2012 is N1,118,326.584.56 (One billion, One hundred and Eighteen thousand, Three hundred and Twenty Six thousand, Five hundred and Eighty Four Naira, Fifty Six kobo).

• In a gesture of peace and humility, PNN’s management pursued an amicable settlement of the matter, upon which MTN offered to pay N425million which is about 38% of what they owe PNN (and about 56 suppliers). PNN then appealed to MTN to increase it to N700million thereby conceding a 37.41% discount to MTN so that all stakeholders would be able to receive a reasonable part the amounts outstanding to them after waiting for 2years. MTN has since discontinued all amicable settlement of the matter.

• It is important to note that PNN’s calculations of what is due is based solely on the Arbitration Award delivered by the arbitrator selected by MTN. MTN has, till date, refused to provide a basis for the N425million offered to PNN as a full and final settlement.

From the foregoing, we have shown that we are doing everything within the legal system of the country to ensure that all amounts due to PNN and any corporate or individual person who transacted business with PNN on behalf of MTN is paid by MTN.

Quite unfortunately, a few of the suppliers have continued to harass officials of PNN with security operatives, in particular the Economic and Financial Crimes Commission (EFCC). We have consistently provided evidence to show to EFCC and the other security operatives that products were supplied by various suppliers on behalf of PNN directly to MTN, and of which MTN has enjoyed the benefit of the supply since February 2008 but obstinately refused to pay what it owes despite the decision of an Arbitrator appointed by MTN itself.

We have written several petitions to the EFCC against MTN about the actions of MTN in obtaining petroleum products under false pretences, consuming it and denial of liability on their part. Past leadership of EFCC had consistently refused to take any action against MTN. We are optimistic that with the renewed vigour of the present leadership of EFCC, positive action will be taken to ensure that justice is served on PNN and the 56 contractors affected by MTN’s action. This is especially necessary in a situation where MTN is lavishing a few million of Naira on ‘humanitarian’ activities and public imaging while hundreds of people are dying as a result of non payment of a paltry sum N1,118,326.584.56 on services rendered for which MTN made profit of over N130Billion.

PNN has also written petitions to the NCC, which is the regulatory authority, but they have also refused to act, claiming that they cannot interfere because the case is in court.

We are aware that PNN has also reported this act of desperate economic sabotage against PNN and 56 other small businesses whose money has been wrongfully withheld since March 2010 to the Honourable Minister of ICT and there has not been any action from the Ministry till date.

We believe that this is only possible because MTN is a colossus which is untouchable in Nigeria. No Nigerian company can however do the same in South Africa. When a persistent cry of justice goes without answer, it almost always leads to greater problems.

It is our resolve that PNN shall get justice, no matter what it takes and all those who have been victims of this transnational corporate tyranny shall be compensated. For any clarifications and updates by any of the affected contractors, please contact the solicitors through the medium provided below.

E.A. OYEBANJI – 08023333190; e-mail: adeoyebanji@yahoo.com

O. ORIOYE – 08023513380; e-mail: orioye.oo@filialpartners.com

ADE OYEBANJI & CO.

SOLICITORS TO PRIVATE NETWORKS NIGERIA LTD