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– TrustCo Mobile – in a case both accused each other of breaching contracts.
TrustCo Mobile had taken Econet to the High Court alleging the local firm illegally terminated a contract under which the two companies offered a mobile-based free life insurance service, EcoLife.
Econet is contesting the High Court ruling that an “earlier termination of the agreement” by TrustCo was not a proper termination, “but an expression of intention to terminate”.
ECONET
The High Court ruled that the contract was still valid. TrustCo wanted the contract reinstated and for its intellectual property rights not to be infringed.
Econet legal counsel Ms Sheila Mugugu confirmed the appeal case number SC 171 referred from High Court case number HC 6065/11.
“Indeed, we filed an appeal in the Supreme Court. You can access the files with the grounds of appeal,” said Ms Mugugu.
Econet lawyers said the firm had argued that TrustCo’s letter was not merely an expression of intention to terminate the agreement.
TrustCo claimed the dispute arose when Econet reportedly failed to pay in full the money due to First Mutual Limited – a partner in the Ecolife tripartite partnership for US$313 million worth of life cover, the local life assurance firm had underwritten in May.
Econet said TrustCo specifically stated that unless they were paid the disputed amounts, they had suspended their obligations under the agreement and were going to shut down their system on June 6, the date Econet disconnected the system to avoid inconveniencing its customers.
TrustCo Mobile provided the software platform that supported the EcoLife transaction system and by virtue of the agreement with Econet, was entitled to receive royalties.
But when the local firm missed the payment deadline of the royalties, TrustCo threatened to terminate the contract.
And Econet, knowing it did not meet the demands to pay the disputed amounts in two weeks, as TrustCo had demanded, deemed the deal to have collapsed on June 6.
Thus, Econet had argued that TrustCo had repudiated the agreement and as “licensed custodian of confidential customer information, it cannot risk that information by giving access to such information to someone in whom it has lost trust”.
Econet argued “whatever happens to that customer data, Econet shall be held to account by the regulators and by its subscribers”.
This was particularly the sentiment considering the protests raised by subscribers against the unsolicited messages TrustCo had allegedly been sending to customers, which analysts commended Econet for taking customer complaints seriously.
TrustCo recently admitted sending “promotional” messages to Econet customers, but argued all was within confines of the agreement the two firms had signed.
The Namibian firm also disputed claims by Econet that it divulged confidential contract information saying all disclosures were in line with requirements of the Johannesburg Stock Exchange.
Econet had also claimed TrustCo demanded an increase in the royalty rate to US$1,11 from the initial agreement of US$1 per subscriber.
But TrustCo disagreed saying the rate was reviewed when the Commissioner of Insurance recommended that the firms include people who were suffering from HIV/Aids or people who had such other pre-existing ailments.
Online Reporter