Rule of Law @ Test in Econet Wireless Dispute

After long drawn years of legal tussles in and out of court corridors, the recent judgment by the Federal High Court sitting in Kaduna reinstating Econet Wireless Ltd’s equity in Airtel Networks Nigeria appears to have reignited the ebbing flames of recurring frictions in the company since inception.
At the centre is Econet Wireless, the South Africa based founding shareholder of what was originally known as Econet Wireless Nigeria.
Econet Wireless, promoted by Strive Masiyiwa, was one of the licensees of the great GSM auction that has spread the mobile revolution in Nigeria but the relationship went sour after a board meeting sacked his company as a shareholder in the Nigerian operations.
Masiyiwa said Econet Wireless was left with no option but to launch a legal offensive.
It however waited patiently until January 24 when Justice Shuaib delivered his judgment on a matter which has been before the courts since 2003, and ordered that: Airtel should reinstate the five per cent (5%) shareholding of Econet Wireless Ltd (EWL); All actions, and resolutions taken by the company since October 2003, at which EWL was entitled to be notified, and to participate in, as a shareholder, but was prohibited, are null and void. This includes decisions to sell shares, issue shares, and also transfer shares to third parties. The name change from Econet Wireless Nigeria Limited, effected in 2003, was irregular, and must be reversed forthwith.
Justice Shuaib further ordered the Corporate Affairs Commission (CAC), to cancel any certificate previously issued for the change of the name of the company and restore the name of the company to Econet Wireless Nigeria Limited.
Emmanuel Otokhine, head of public relations at Airtel Nigeria however said that it has filed an appeal against the judgment, while reiterating that said judgment will have no impact on the holdings of other shareholders in Airtel Nigeria.
Airtel Nigeria was founded as Econet Wireless Nigeria in 2001, with Mr. Masiyiwa's Econet Wireless International owning 5per cent stake and a contract to run the company.
But Econet's Nigerian partners scaled back the management deal, called in Vodacom and renamed the company Vee Networks.
Vodacom then pulled out and in 2006, the Nigerian partners reached a deal to sell 65% stake to Celtel, a unit of Zain.
Econet said that such a deal is not valid because it was not given the first right of refusal on the shares.
Masiyiwa promptly initiated legal proceedings to seek justice and before Bharti begun talks to buy Zain's African operations for about $10.7 billion, he claimed that Zain had given an undertaking to a tribunal set up by the Federal High Court of Nigeria the previous year that it will not sell its Nigerian unit until the issue of its ownership is resolved.
The dispute is also being heard by the United Nations Commission on International Trade Law arbitration.
As Econet Wireless savour this initial victory, there are some issues begging for some clarifications.
For instance, why did Celtel, Zain and Bharti-Airtel go ahead with the purchase of the Nigerian company when it seemed clear that Econet Wireless was a shareholder?
What happened to the supposed undertaking given by Zain to a tribunal that it will not sell its Nigerian unit until the issue of its ownership is resolved?
Nigeria should be careful not make a business concept out of rule of law.  Enforcement of rule of law is still the only way to rebuild Nigeria’s economy hobbled by years of corruption and mismanagement
The international business community and indeed the world is watching with keen interest and hoping for amicable resolution of this dispute.
Already, Nigeria has plummeted in World Bank Global Doing Business Report 2012, as it ranked 133 out of 183 countries in the world as result for many factors.
For Nigeria to attract the much needed investment there must be rules and performance requirements that are fair for everyone in the environment.