A N540million suit has been slammed on a mobile telecommunications service provider, Zain Nigeria Limited (formerly Celtel) at a Lagos High Court by an engineering firm, Procomtel Limited, over alleged breach of contractual agreement.

The firm is also accusing the telecommunications outfit of refusing to settle an arbitration award made against it.

In a statement of claim filed by its lawyer, Oladipo Okpeseyi (SAN), Procomtel stated that the suit was informed by Zain’s alleged refusal to settle the award made in 2007 by an arbitrator on a contractual dispute between both companies.

It said parties had, in 2005, jointly agreed to submit their dispute before the arbitrator, Mr Olumuyiwa Ajibola, for arbitration and pledged to be bound by the outcome.

Procomtel averred further that upon the completion of the arbitration proceedings, during which parties were dully represented, an award was made against Zain requiring the company to pay the claimant the sum of N415.9million.

Procomtel averred that Zain’s alleged “failure to pay within the stipulated 28 days, particularly the sub-total of N390,924,284.87 attracts an interest rate of 17 per cent per annum effective from June 27, 2007 till liquidation of the sum awarded.”

However, in its statement of defence, Zain admitted awarding contract to the claimant for the construction of 22 base stations.

It stated that the cancellation of the contract was occasioned by the claimant’s failure to comply with its instructions as it relates to quality and time frame.

It denied the existence of any outstanding indebtedness to the claimant when the contract was terminated.

Zain said what it paid to Procomtel was the actual amount commensurate to the work done on the said contract.

It also denied that the decision to refer the dispute to arbitration was based on any agreement between the parties but an order made by Justice Olutoyin Ipaye of a Lagos High Court.

Zain stated further that it was currently challenging the legitimacy of the said award.

It added that it was pursuing a motion seeking to set aside the suit on the basis that the arbitrator exceeded the scope of the case referred for arbitration.

The defendant described the suit by Procomtel as another in the series of attempts by the claimant to harass and embarrass it.

It then urged the court to dismiss the suit with substantial cost on the ground that it is baseless, speculative and an abuse of court process.

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