Telkom in Constitutional Court appeal

By Dave Glazier for Telkom
Johannesburg, 12 Jan 2007

The contract dispute between local fixed-line operator Telkom and US software firm Telcordia has escalated, with Telkom refusing to accept defeat.

On 13 December, Telkom lodged an application with the Constitutional Court for leave to appeal the Supreme Court of Appeal (SCA) ruling made in November, notes Lennard Cowan, Telcordia's attorney of record for all South African litigation matters.

Telcordia believes Telkom's arguments have no merits in the Constitutional Court, he adds.

However, "Telkom is alleging that it's a constitutional issue," he notes.

While pointing out that the Constitutional Court is usually expedient in giving its answers in such issues, Cowan adds: "We now await the response from the Constitutional Court as to whether Telkom will be allowed to argue the application for leave to appeal."

Meanwhile, any thoughts of arranging dates for arbitration to determine the amount that Telkom will have to pay Telcordia have been shelved, he says.

Some sources estimate that after losing out at the SCA, in what originally appeared to be the final chapter in a bitter five-year-long legal saga, Telkom could be ordered to pay up to R1.5 billion.

However, financial analysts have indicated this would be a worse case scenario and the amount Telkom will pay is likely to be substantially less.

Telkom's group executive for legal services, Anton Klopper, was quoted in the media late last year as saying Telcordia offered to settle the matter in exchange for about $50 million (R360 million), just before the SCA ruling.

While Telcordia has confirmed negotiations to settle did take place, neither party will say how much Telcordia would have accepted to close the issue.