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Wednesday, November 07, 2007

NITEL to pay N14bn damages to Interstella

The Federal High Court sitting at Umuahia, Abia State on Monday ordered the Nigerian Telecommunications Limited (NITEL) to pay the sum of N14 billion to Interstella as damages for a breach of contract.

Delivering judgement, the presiding judge, Mr. Justice H.T. Soba, on suit No. FHC/Um/CS/95/2004 between Interstella Communications Limited who is the plaintiff, and NITEL as the defendant, granted all the claims of the plaintiff as endorsed in the statement of claim including that defendants conduct breached contract by failing, refusing or neglecting to provide the services contracted by the defendant when it leased out its 36 E1 switched ports, 9 E1 transmission links and half STM1 circuit on SAT 3 to the plaintiff.

The court also ordered the defendant to immediately provide the plaintiff with half STM1 circuit on SAT3, which the plaintiff has paid for, since October 2006.

Payment by the defendant to the plaintiff of the sum of N1.944 billion per annum as revenue accruable to the plaintiff per annum from its investments on the 36 E1 switch ports and 9 transmission E1 beginning from 2002 and continuing thereafter until the accumulated sum is paid in arrears.

Equally, the court directed that payment be made to the plaintiff of two million four hundred and eighty US dollars per month from April 2007 till date until all accumulated arrears are paid, being the monthly revenue accruable to the plaintiffs investment on half STM circuit on SAT3 since October 2006.

The sum of two billion Naira was awarded as exemplary damages for damages mindlessly inflicted on the plaintiffs business, the corporate goodwill, image and integrity reputation, financial loses occasioned and flowing directly and being reasonably foreseeable as direct consequences of the defendants conduct, with an interest rate of 30 per cent until judgement, and thereafter at 25 per cent until the liquidation of judgement debt, even as payment of N250,000.00 being cost of litigation in favour of plaintiff.

In addition, apart from the declaratory orders, and the interest accruing to the judgement debt, the immediate financial implication of this judgement is that as at November 6, 2007, NITEL is liable to pay a total sum of N11.72 billion and $14,150,000.00 to Interstella Communications Limited.


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