Econet to appeal Trustco ruling with the Supreme Court

Econet Wireless Zimbabwe, said yesterday it would appeal against a Zimbabwe high court ruling ordering it to continue with the Trustco partnership.

Trustco Mobile Private Limited of Namibia is now facing a potentially lengthy and tedious legal battle in Zimbabwe over a disputed mobile life insurance product launched in October last year.

Lawyers for Econet Wireless have said that their client will appeal to the Supreme Court following a ruling by the High Court that said an earlier termination of the agreement by Trustco Mobile was not a proper termination, but an "expression of intention to terminate at a future date", and therefore was still valid.
 
Econet had argued that Trustco's letter was not merely an expression of an intention to terminate the agreement.  The letter specifically stated that unless they were paid the disputed amounts, they had suspended their obligations under the agreement and were going to shut down their system on 6 June, the date Econet disconnected the system to avoid inconveniencing its customers. 
 
Thus, Econet had argued that Trustco had repudiated the agreement. 

Econet is a licensed custodian of confidential customer information. It cannot risk that information by giving access to such information to someone in whom it has lost trust. 

Whatever happens to that customer data, Econet shall be held to account by the Regulators and by its subscribers.

Commentators have referred to the protests raised by subscribers against the unsolicited messages Trustco had been sending to customers and commended Econet for taking customer complaints seriously.

Trustco Mobile Private Limited had earlied issued a press release which had a celebratory tone.

The statement read, Trustco Mobile's operation in Zimbabwe will be back on track soon, following an interim order handed down yesterday by the High Court of Zimbabwe against Econet, a company incorporated in Zimbabwe.

Group Managing Director of Trustco, Quinton Van Rooyen says he is both pleased and impressed with the way the matter was dealt with by the High Court in Zimbabwe. "We are delighted with the ruling and foresee that none of the almost two million subscribers to 'Ecolife' will loose any of their accumulated life cover."

Van Rooyen says it is anticipated that Trustco Mobile's venture in Zimbabwe will continue for the benefit of all parties concerned. "We have successfully implemented this product in Namibia and Zimbabwe and look forward to introducing this exciting concept to other emerging high growth markets in Africa."

Timeline of the Econet Trustco case

Trustco sues Econet
Econet, Trustco and First Mutual Life Assurance concluded a tripartite agreement in which the Namibian firm was to provide software and support service to Econet for facilitation of the popular free life insurance cover to Zimbabwean cellular phone users.

Econet would then procure life cover from First Mutual Life Assurance.

The free life cover was going to be offered to all clients against purchase of Econet airtime.

Econet has sought to terminate the agreement following some disagreements, but Trustco has filed an application challenging the decision and advocating for the restoration of the status quo that obtained before the cancellation.

Zimbabwe High Court hands down interim order against Econet
The High Court of Zimbabwe on Monday handed down an interim order against Econet in response to Trustco's application for an interdict last month. The interdict sought to enforce Econet's compliance with the Ecolife contractual obligations and to prohibit the company from infringing on Trustco's Intellectual Property by, as it appears, deploying a similar concept. Econet itself has indicated that it is working on its own Ecolife system to replace Trustco's.

The High Court Judge directed Econet to restore to Trustco Mobile the internet based reporting links and all access to Trustco Mobile hardware and software, thus enabling it to monitor and process airtime purchase transactions and otherwise perform its obligations in terms of the agreement;

Econet was also directed to refrain from undertaking and implementing a competing, infringing service to that provided by the first applicant (Trustco Mobile) in terms of the agreement.