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Telkom vs Telcordia: Case Not Closed

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11/28/2003
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South African national operator Telkom SA Ltd. has won the latest round of a three-year legal battle with OSS firm Telcordia Technologies Inc. over a contract dispute (see Court Rules Against Telcordia).

But the saga isn't over yet.

The scrap began in 2000 when an "integrated agreement" was terminated by both parties, "after disputes arose regarding Telcordia's performance obligations," says Telkom spokesman Andrew Weldrick. As a result, the carrier cancelled an order for a Telcordia activation and service assurance system.

The OSS firm then initiated proceedings against the operator early in 2001, claiming $130 million it believed it was still owed. Telkom counter-claimed for more than $300 million, including a refund of fees already paid to Telcordia.

In September 2002, an International Chamber of Commerce (ICC) arbitrator found in favor of Telcordia, but that decision has now been quashed by the Pretoria High Court following a six-week review of proceedings. The court ordered Telcordia to pay Telkom's costs, and sent the case to South Africa's Supreme Court of Appeal, though a date has not yet been set for that hearing.

The Telkom spokesman says the carrier made a provision for 58 million South African Rand ($9.1 million) in legal expenses earlier this year, but says "we still do not have a clear indication of the costs that will be claimed in terms of the court order," though the sum is likely to be "quite significant."

Telkom says its OSS division has developed the software solutions in-house since the breakdown of the Telcordia relationship.

Telcordia could not be reached to comment on the Telkom affair.

— Ray Le Maistre, International Editor, Boardwatch

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