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Union takes SPTC, MTN to court over joint venture

SWAZI MTN Limited and Swaziland Posts and Telecommunications Corporation (SPTC) have been dragged to the High Court by Swaziland Communications and Allied Workers Union for an order declaring the Joint Venture Agreement (JVA) entered into by the parties unlawful.
The JVA was entered into on July 31st, 1998 at Ezulwini.
Cited as respondents are Swazi MTN Limited, SPTC, Mobile Telephone Networks Holdings (PTY) Limited, Mobile Telephone Networks Africa (PTY) Limited and Swazi Empowerment Limited.
The union’s President Innocent Ngcobo, in his founding affidavit, says on July 31st, 1998 the companies entered the JVA in terms of which were that:
n Following the first respondent’s (Mobile Telephone Networks Holdings (PTY) Limited) successful proposal as a joint venture partner of the third respondent (SPTC) to operate a network in Swaziland, the shareholders, including  the third respondent have formed a public company which will be granted a licence to operate a network in the territory.
n The agreement is subject to the issuing of a licence to the company on terms and conditions acceptable to the controlling shareholders.
n SPTC must conclude an interconnect agreement between the company and SPTC on terms and conditions acceptable to the controlling shareholders.
n Each shareholder will subscribe for, and will be issued with such a number of ordinary shares in the company.
Ngcobo explains that SPTC was established by an Act of Parliament, namely the Swaziland Posts and Telecommunications Act No. 11 of 1983.
He says Part II of the Act provides for the establishment and management of the Corporation.
“In this part of the Act, the powers of the minister and the board are clearly defined,” he explains.
“Part III of the Act deals with the powers and functions of the Corporation including the power to establish and operate telephone services and to perform incidental services relating to providing, installing and maintaining telephone apparatus.
“A proviso to Section 59 (1) allows the SPTC managing director to grant a licence to any person to construct, maintain and operate telephone apparatus. The proviso also stipulates the condition under which the managing director may grant a licence to another entity.”
The union, which is being represented by Bongani ‘BS’ Dlamini, states that the overall effect of the JVA was that SPTC cannot now operate a GSM Network activity, contrary to the provisions of the Swaziland Posts and Telecomunications Act, 1983.
“It is thus respectfully submitted that the JVA indirectly or unlawfully purport to amend the provisions of the Swaziland Posts and Telecommunications Act, 1983,” the union’s president argues.
“Because of the JVA, SPTC has had to abandon its One Mobile telephone facility, a service to the public being pursued by SPTC in terms of Section 59 (1) of the Act. This has resulted in a large number of jobs within SPTC hanging in the balance.”
Ngcobo says the union, therefore, had a substantial and direct interest in pursuing the validity of the Joint Venture Agreement and the impact that it would have on the operations and sustainability of jobs within SPTC.
He claims evey person and stakeholder in an organisation had the duty to ensure that all illegal activities and transactions were brought to the attention of the court and suppressed accordingly.
Ngcobo alleges that the JVA was unlawful and contrary to Section 30 and 31 of the Competition Act, 2007 in one or more of the following ways:
n The JVA seeks to establish a monopolistic enterprise in the provision of mobile telephone service in the country.
n The JVA prohibits the issuing of a mobile telephone licence in Swaziland which may result in the abuse of dominance by the shareholders of the company to be formed.
n The JVA seeks to eliminate competition within the mobile telephone industry generally.
n The JVA allows for collusion in the fixing of prices within the mobile telephone industry in Swaziland.
The case is pending at the High Court.

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