Econet Taken To Court For Breach of Contract

Econet Taken To Court For Breach of Contract
Published: 2016 August 03 03:23:56 (3623 Views)

Econet Wireless Zimbabwe has been taken to court for breach of contract, following failure to honor an alleged deal to import 2 500 sim cards.

Econet is being sued of $60 000 by Callander Enterprises and its proprietor, Makomborero Muza, for failing to make payments after the firm imported sim cards allegedly for the mobile service provider on the understanding that the two would enter into an agreement regarding profit sharing ratio from the distribution, sale and use of the cards to payphone operators throughout the country.

But Econet Wireless has dismissed the legal suit arguing that while it activated the sim cards on its network, there was never an agreement on profit sharing, neither were the sim cards imported on its behalf.

In papers filed last month, Callander Enterprises said due to foreign currency challenges in 2008, Econet Wireless, through its managers Mr Macdonald Chabvonga and Mr Nigel Masiyiwa, introduced Mr Muza to one of its business partners in South Africa, so that his firm could import the sim cards using own financial resources on behalf of Econet Wireless.

“It was mutually agreed verbally by Econet Wireless, represented by its managers, and Callander that after purchase of the sim cards, Econet Wireless would register, activate and allocate phone numbers to the sim cards, which plaintiff would then distribute for use to several payphone operators who would buy airtime on the cards,” read the papers.

“Plaintiffs managed to raise the required foreign currency which defendant did not have then, and bought 2 500 sim cards from South Africa on behalf of Econet Wireless and it distributed the sim cards across the country, to payphone operators together with individuals who were interested in the payphone business.

“The sim cards had the advantage that they had an in-built billing system.”

The firm averred that Econet Wireless has since converted the sim cards into Buddie lines but has been refusing to have both parties sign a written agreement, thus continuing to deprive it of both profit and the money spent to purchase the cards.

“Plaintiffs have been impoverished by the enrichment of the defendant regarding the amount spent purchasing the sim cards, as the defendant is making use of the sim cards in its cellphone business to gain personal profit by selling airtime to possesors of the cards who are registered on its cellphone network,” read the papers.

In response, Econet Wireless denied liability arguing that its business was not run through verbal agreements, saying the only agreement it had with Callander Enterprises was that of a payphone business.

Econet Wireless submitted that Callander Enterprises approached them with a request for assistance on how it could increase supply of its sim cards.

“It was at this juncture when Econet Wireless through one of its directors, informally advised plaintiff that it was free to, at its own risk and cost, and in terms of clause 7.8 of the written agreement, purchase and import the sim cards directly from South Africa which cards Econet Wireless would register on its network,” read the papers.

Econet Wireless argued that Callander Enterprises suffered loss on its account and that the firm had no claim against it on the line numbers allocated to subscribers as they were owned by the mobile service provider.

The case is due to go for trial before a High Court judge.

- Herald

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