SLT, Just In Time settle Rs. 673 m case out of court

Wednesday, 16 April 2014 02:59 - - {{hitsCtrl.values.hits}}

National telecom giant to pay Rs. 502 m immediately as part of settlement to JIT and balance Rs. 171 m interests in six equal instalments
JIT won arbitration award in 2012 over the supply of IPTV system for broadband services in 2007/8 before SLT appealed in Commercial High Court

Sri Lanka Telecom Plc (SLT) and Just In Time Holdings Ltd. have come to an understanding to settle a long-drawn dispute out of court, with the former agreeing to pay the latter Rs. 673.3 million. SLT said that as part of the settlement it will pay Rs. 502.17 million as balance payments to JIT and legal cost. The interest claimed amounting to Rs. 171 million will be paid in six equal instalments.

The out of court settlement follows JIT originally claiming $ 4.74 million as payments due from SLT under the contract with damages over the supply of IPTV system for broadband services in 2007/8. Arbitration proceedings were concluded and award was delivered in favour of JIT on 30 March 2012 with damages, costs and legal interest. Based on legal advice that it has sufficient and substantial legal grounds to challenge the arbitral award including damages, costs and legal interest under the award, SLT Plc filed an appeal in Commercial High Court. JIT too filed an application in Commercial High Court to enforce the award of arbitration given in favour of JIT at the conclusion of the arbitration between JIT and SLT in terms of Section 31 of Arbitration Act. Separately JIT has also initiated arbitration claiming arrears under agreement between JITHPL and SLT to provide WAN connection to NSB. SLT has a back-to-back agreement with NSB and NSB has failed to make payments under the agreement. SLT terminated the agreements with JIT in November 2011, upon termination of the SLT agreement with NSB. JIT is claiming Rs. 34 million as moneys for the period up to termination, Rs. 10 million as interest and Rs. 13 million as rentals up to unexpired period of the case. Hearing of this case is scheduled for 6 May 2014. The two cases involving JIT are among nine litigations over which SLT hasn’t made provisions in its accounts pending the outcome of the appeals and hearings. In 2013, SLT Group increased its revenue by 6% to Rs. 60 billion whilst operating profit rose by 7% to Rs. 6.5 billion. Pre-tax profit increased by 26% to Rs. 7.36 billion and after-tax profit by 38% to Rs. 5.4 billion. Caption