By Chioma Obinna
LAGOS — A N540 million suit has been filed against Zain Nigeria Limited ((formerly Celtel) over its alleged refusal to pay an arbitration award made against it and breach of contract.

Zain, a mobile telephone network provider, was dragged before a Lagos High Court by Procomtel Limited, an engineering firm, which claimed that Zain allegedly  refused to settle the award made in 2007 by an arbitrator on a contractual dispute between both companies.

However, Zain in its statement of defence, while admitting the award of contract to the claimant for the construction of 22 base stations, said the cancellation of the contract was occasioned by the claimant’s failure to comply with its instructions as it relates to quality.

It also denied the claim by the company for an outstanding indebtedness when the contract was terminated.

Procomtel Limited in its statement of claim, said the debt was as a result of agreement reached between parties in 2005, who jointly agreed to submit their dispute before the arbitrator, Engr. Olumuyiwa Ajibola for arbitration and pledged to be bound by the outcome.

Procomtel averred 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 about N415.9m.

But instead of honouring the final arbitral award as jointly agreed by parties, Zain allegedly breached the agreement by refusing to pay within the stipulated 28 days.

The claimant argued that  Zain’s alleged “failure to pay within 28 days of the final award, particularly the sub-total of N390.9m attracts an interest rate of 17 per cent per annum effective from June 27, 2007 till liquidation of the sum awarded.”