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Digicel baulks at £15.5m fee from LIME lawsuit

Published:Friday | April 30, 2010 | 12:00 AM

Mark Titus, Business Reporter

Mobile service provider Digicel Group is believed to be seeking a negotiated settlement as one option in its bid to have its rival, Cable & Wireless Communications (CWC), lower the £15.5 million (J$2.09 billion) figure it said it had to shell out to defend a case unsuccessfully brought against it in the English High Court, by Digicel.

Digicel confirmed this week that it will be seeking to have reduced, the legal fees it was ordered to pay after its claims against Caribbean subsidiaries of CWC, which trades in the Caribbean as LIME, were dismissed in London two weeks ago.

The case, brought by Digicel in July 2007, sought US$100 million (J$9 billion) in damages from the former monopoly providers for alleged breaches of the telecoms statutes in six Caribbean territories - Barbados, Cayman Islands, St Lucia, St Vincent and the Grenadines, Grenada, and the Turks and Caicos Islands - during the roll-out of its mobile networks between 2002 and 2006.

Similar charges were also filed by Digicel against Telecommunications Services of Trinidad and Tobago (TSTT), jointly owned by the Trinidadian government and Cable & Wireless.

"We will vigorously seek to minimise CWC's/TSTT's inflated claim for costs," Digicel said in a statement on Monday.

The company declined comment on its strategy, but well-placed sources say it includes talks with CWC, whose headquarters is in London.

At the same time, Digicel said it was not backing away from plans to pursue further recourse in its fight on the substantive issues.

"We reaffirm our disappointment with the decision announced on April 15 and continue to consider our position in this regard," the statement said.

Further action could be in the form of an appeal in the UK and/or petitioning the Telecommunications Authority of Trinidad & Tobago to conduct an inquiry into the actions of TSTT and its contractor, Nortel, Digicel said a day after the ruling.

With the ruling against it, Digicel, which is headquartered in Jamaica, argued that it should only be asked to pay 80 per cent of the cost on the standard basis, but the UK High Court last Friday agreed with CWC that cost must be paid on an indemnity basis in six jurisdictions.

Justice Morgan, in his written judgment of April 23, was critical of TSTT, in which CWC has minority interest, saying its conduct "was contrary to honest practices", and had "called untruthful evidence to support their denial" at the trial.

He marked his disapproval by withholding the awarding of their cost on an indemnity basis, ordering Digicel to pay only 87.5 per cent of the recoverable costs in that regard.

While taking solace in the fact that the judge ordered a reduced liability for costs to TSTT, Digicel is now contending that the figures advanced by the Trinidadian telecoms firm are inflated.

The judge, in awarding costs against Digicel, said the firm did not comply with pre-action practice direction and made no attempt to send a letter before action.

He also held that a Digicel press announcement the day before the Cable & Wireless Plc annual general meeting, was intentionally timed "so that those matters would be potentially damaging to Cable & Wireless Plc".

The High Court judge also said Digicel, in its original press statement, "massively overclaimed" and had "put forward an excessive number of allegations of unlawful acts" and that claims that Cable & Wireless Plc had acted in a conspiracy were "always improbable, speculative and weak".

Of the award amount, £8 million (US$12 million) was ordered paid within 28 days by Digicel on account of its ultimate liability for costs.

Digicel said it incurred £9.5 million in the pursuit of the case.

CWC has said its cost recovery will be accounted for as an exceptional gain in its 2010/11 accounts.