The Mauritius Supreme Court, in a decision handed down on 9
August 2017 on the case of Emtel Ltd v The Information and
Communication Technologies Authority & Ors, awarded over
MUR524-million in damages under article 1382 of the Mauritius Civil
Code as a result of the joint "fautes" of the
Information and Communication Technologies Authority (the
"Authority"), Mauritius Telecom Ltd
("MT") and Cellplus Mobile
Communications Ltd
("Cellplus").
Emtel's contention against the Authority was that it had, in
essence, failed in its duty to ensure that the conditions of the
global system for mobile communications (GSM) licence granted to
Cellplus were complied with. Emtel's contention, against MT and
Cellplus, was that they had breached the conditions of the GSM
licence and engaged in unfair competition resulting in damages to
Emtel.
In an 89-page judgment, the Supreme Court analysed the 783
documents produced, and held that MT and Cellplus had breached the
condition against cross-subsidisation which they had implicitly
agreed to comply with. This requirement was stated by the Authority
as "condition[s] to be met" when Cellplus was granted the
GSM licence. The court held that both MT and Cellplus had
intentionally made use of unfair means leading to a
"rupture d'égalité dans les moyens de la
concurrence ..." and had committed an "acte
fautif". In so far as the Authority was concerned, the
Supreme Court held that the Authority had a responsibility to
ensure compliance with the conditions that it had itself set.
Instead, the Authority "completely disregarded its
responsibility, failed to administer 'des prescriptions
plus fermes' and shown tolerance of the breach of the
conditions. In these circumstances, it can only be concluded that
it has committed a 'faute lourde'."
Regarding the damages, the Supreme Court accepted the
counterfactual case whereby the key principle is not to use
hindsight and considered the "margin squeeze" test rather
than the anti-competitive behaviour. The court referred to an
article entitled L'Évaluation des Préjudices
Économiques published in the Revue de Droit
Bancaire et Financier by Professeur Maurice Nussenbaum, who
suggests that in a case where economic loss has been proven but the
quantum is uncertain, the defendant should be required to give its
assessment "mis à contribution".
The Supreme Court relied on article 1153 of the Civil Code to
find that "where the defendant has on account of his bad faith
caused to the claimant a loss distinct and separate from the loss
resulting from the delay in settling an amount due, an award in
compensatory damages with interest may be made" and found
"that 'mauvaise foi' has also been proved and
that compensatory damages with interest pursuant to article 1153
alinéa 4 are warranted and that the interest should run as
from the date of the tortious act."
This unprecedented judgment is ground-breaking in many respects,
and as it is the first time that the Authority and State-controlled
operators have been found liable for unfair competition. Principles
relating to unfair practices in the telecommunications sector have
been clarified, as well as how damages for loss of market share
should be calculated.
Thierry Koenig SA was the attorney representing Emtel in this case.
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