Broker sues Airtel over Shs13.5 billion commission

KAMPALA. Telecommunication firm, Bharti Airtel Limited has been sued for allegedly failing to pay commission worth more than Shs13.5 billion to a businessman who brokered the sale of Warid Telecom to Airtel.

In the case before the Commercial Court, Mr Wissam K. Fawaz contends that $3,729,423.98 (Shs13,528,858,433.48) is 2 percent of $186,471,199 (Shs676,442,921,492.40), the value of Warid telecom’s assets in Uganda that were acquired by Bharti Airtel Limited.

Through his lawyers, Mr Fawaz is also claiming for the interests at a rate of 10 percent per year from May 2013 till full payment, general damages and legal costs incurred.

It is alleged that in October 13, 2009, the chairman of Bharti Airtel Limited, Sunil Mittal communicated to His Highness Sheikh Nahayan Mabarak Al Nahayan, the chairman of Abu Dhabi Group regarding Warid’s Investments in Uganda and Congo Brazzaville where Mr Fawaz desired.

Mr Fawaz contends that he was responsible for coordinating the visit of Mr Mittal to Sheikh Nahayan and that on October 14, 2009, the corporation’s director and in charge of Group Mergers, acquisitions and business development at Bharti Airtel Limited, Shaun Parmar engaged his services in the acquisition of Warid telecoms assets and operations in Uganda.

“As per the engagement letter, Clause 1 did set out the role of the plaintiff, that is to advise and assist Bharti Airtel Limited on the approach to the closure of the transaction as well as other related matters as Bharti Airtel Limited would require from time to time regarding the acquisition of Warid telecom’s assets in Uganda,” reads the court documents in part.

It is alleged that the engagement letter provides that Mr Fawaz who claims having organized a number of meetings between the two parties leading to the acquisition of Warid telecom’s assets in Uganda, would be paid a success fee of 2 percent of the enterprise value of the target.

It is alleged that despite various demands, Bharti Airtel Limited ignored the complainant’s requests to pay him his fees worth $3,729,423 (Shs13 billion).

Court documents indicate that on January 3 this year, Bharti Airtel Limited was summoned to file its defence within 15 days upon receipt of the complaint.

But on January 5, Airtel Uganda Limited wrote to the lawyers of MMAKS Advocates declining service of court documents, because the company is neither an appointed agent of Bharti Airtel Limited nor party to the court proceedings nor indebted to Mr Fawaz.

In the letter signed by Mr Dennis Kakonge on behalf of legal and regulatory director Bharti Airtel Limited, advised that service of court documents be made directly to the accused party.

“For the avoidance of any doubt, the stamp of Airtel Uganda Limited that was appended to the summons and court pleadings was appended for the purpose of receiving the documents to access the nature of the claim but shall not construed as acceptance of service by Airtel Uganda Limited and for the avoidance of doubt is hereby cancelled,” reads part of the letter.

Meanwhile, the case has been allocated to Justice Anna B. Mugenyi pending hearing.

Utility
On April 18, 2013, Bharti Airtel Limited acquired the entire issued share capital of Warid Telecom Uganda Limited.