Settlement of Arbitration Proceedings and Litigation: Telkom SA SOC Limited and Blue Label Telecoms and others

09 December 2014

In June 2011, arbitration proceedings were instituted by Africa Prepaid Services Nigeria Limited (“APSN”) against Multi-Links Telecommunications Limited (“Multi-Links”) under the auspices of the Arbitration Foundation of South Africa. APSN is a subsidiary of Blue Label Telecoms Limited (“Blue Label”). Multi-Links is a former subsidiary of Telkom SA SOC Limited (“Telkom”). APSN claimed payment of the sum of US$457 million against Multi-Links arising out of the termination of the Super Dealer Agreement between Multi-Links and APSN, in relation to the distribution of Multi-Links’ products and services by APSN, in Nigeria. Multi-Links counterclaimed against APSN for payment of the sum of US$123 million.

Telkom and Multi-Links subsequently obtained a stay of the arbitration proceedings and instituted an action against Blue Label, Africa Prepaid Services (Pty) Ltd (the immediate holding company of APSN) and certain individuals, including Mr Mthunzi Mdwaba and Mr Thami Msimango for payment of the sums of US$528 million and the sum of US$196 million respectively. In the action APSN counterclaimed against Telkom and Multi-Links for payment of the sum of US$457 million. 

Today, the parties to both the arbitration proceedings and the action announced they have agreed to settle their disputes on the basis that all claims and counterclaims are withdrawn and each party will be responsible for the payment of their own costs. 

In terms of the settlement all of the parties have agreed to withdraw all allegations of any wrongdoing which they made against each other in the course of advancing their various claims, counterclaims and defences. 

The Chairman of Telkom, Mr Jabu Mabuza and the Chairman of Blue Label, Mr Larry Nestadt, said they are pleased the disputes have been amicably resolved.