International arbitrator rules in favour of Econet

An international arbitrator this week ruled in favour of Econet Wireless in its long running dispute with Trustco Mobile.

Staff Writer

The arbitrator dismissed a claim by Trustco that it is owed US$6,9 million by Econet and instead ordered that Trustco should pay Econet US$455 500.

The ruling by the arbitrator, an international lawyer from South Africa, is the last chapter in the battle between Econet and Trustco which has already been to the Supreme Court of Zimbabwe, which also ruled in favour of Econet.

In 2010, Econet set up a life insurance service called Ecolife. This service allowed its customers to get free life cover if they met a minimum monthly spend on their telephone service of only US$3 per month. The customers did not pay any monthly premiums, as with normal insurance schemes.

The system set up by Econet used a computer software system developed by a company from Namibia, Trustco. Under the arrangement between Econet and Trustco, Econet was supposed to pay license fee based on the number of customers using the service.

After almost a year of working together, Econet said Trustco began to demand a higher fee for each customer than had been originally agreed. This led to a dispute between them, which eventually led Trustco to cancel the contract between the two parties.

Econet was forced to end the service altogether.

The parties, Econet and Trustco, ended up in a bitter court battle which went all the way to the Supreme Court of Zimbabwe, which ruled in favour of Econet. After the Supreme Court ruling, a special arbitrator was chosen by the two parties, to assess the actual financial claims.

In line with the ruling issued this week, Trustco is required to pay Econet.

The ruling does not mean that Econet can now resume Ecolife as the company would have to find a completely new computer software system.
A spokesman for Econet said: “We are very pleased with this final ruling. Although we have won the court case, the software system used for Ecolife belongs to Trustco and not to Econet.

It is not possible to run it without this software. We are now free to look at other options”.

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