9th April 2019

The Nation

Arbitrator Awards $9.7m to Swap Technologies

A sole arbitrator, Olatunde Busari, has awarded Mr. Olatunde Titilayo and Swap Technologies and Telecoms Plc $9.7 million.

A sole arbitrator, Olatunde Busari, has awarded Mr. Olatunde Titilayo and Swap Technologies and Telecoms Plc $9.7 million.

In a final award after ad hoc arbitration, the sole arbitrator also awarded $52,500 to the claimants, being a portion of the arbitrator’s fees.

The claimants were represented by Mr. Kemi Pinheiro (SAN), who led Bolu Akadri, Adebayo Abimbola and Lolade Bashir.

IHS Towers NG Ltd was the respondent in the arbitration.

A copy of the final award, made in January 21, was obtained yesterday.

The sole arbitrator said: “I, Olatunde Busari, SAN, FCIS, C.Arb, having heard and considered the evidence by the parties and submissions of counsel, do hereby award and direct, in full and final settlement of all claims and counterclaims in this arbitration as follows:

"The respondent shall pay to the claimants, within 21 days from the date of this award, $9,721,395.27 being the amount awarded on the claimants’ claim; $52,500, being 50 per cent of the portion of the arbitrator’s fees paid by the claimants; N12,500,000, being 50 per cent of the assessed costs of legal representation for the claimants in this arbitration; N658,235.50, being 50 per cent of the portion of the administrative expenses paid by the claimants in this arbitration."

The sole arbitrator resolved a dispute that arose between the claimants and the respondent over a Managed Services and Collocation Services Agreement dated July 31, 2015 (Exhibit CE.1).

By virtue of the agreement, the claimants entered into a contract with the respondent for the management and operation of Swap Technologies and Telecoms’ 702 towers (tower sites).

It was the claimants’ contention that the respondent had a contractual obligation to ultimately acquire Titilayo’s equity in Swap Technologies and Telecoms.

The claimants said the agreement (Exhibit CE.1) was only a stop-gap towards the actualisation of the acquisition goal.

But the respondent contended that Exhibit CE.1 gives it an option to acquire 100 per cent of Swap Technologies and Telecoms’s shares or such smaller percentage of Titilayo’s equity in the company at the relevant time pursuant to Clause 12.3 of the agreement.

IHS Towers was of the view that the option to acquire the shares was not an obligation under Exhibit CE.1.

It, therefore, argued that it was not compelled to exercise that option under the agreement’s terms.

Following the dispute, parties opted for arbitration as agreed in a clause in the contract.

The sole arbitrator dismissed the respondent’s counter-claim and held that no evidence was led by parties on the issue of interest.

He awarded royalties on the remainder of the "Lock-In" period of five years at $240 per month per site on 702 sites, totaling $6,739,200.00.

Busari also held that royalties payable on 65 proven sites at a monthly rate of $240 per site due from April 5 to June 30, 2017 amounted to $46,800.

The SAN further awarded $1,399,395.27 to the claimants, being unremitted royalty fees due to them from July 2016 to March 2017.

The sole arbitrator awarded $1.5 million as general damages, totalling $9.7 million.

"In the instant case, no evidence whatsoever was led by the parties on the issue of interest. Accordingly, I shall therefore not grant any interest on the amounts awarded," the sold arbitrator held.

The respondent’s lead counsel was Mr. Adewale Atake.