This
matter has got a chequered history indeed.
The
applicant is an incorporation which provides national cellular
telecommunications service in Zimbabwe, among other services, by
virtue of a licence issued in terms of the Postal and
Telecommunications Act [Chapter
12:05]
(the Act) by the first respondent, which is the statutory authority
established in terms of the Act to superintend the licencing and
regulation of telecommunication service in this country under the
watchful eye of the second respondent, the Minister charged with the
administration
of the Postal and Telecommunications Act [Chapter
12:05].
The
applicant was initially issued with a national cellular
telecommunications licence in May 1998. It was issued with a revised
licence on 26 June 2002; a licence which, in terms of its clause 4,
was valid for 15 years from the date of its signing. That licence
contains the terms and conditions under which the applicant is
required to provide the service.
I
have said that the relationship between the parties has had its fair
share of problems. At some point, because of the squabbles relating
to the applicant's shareholding, which the regulatory authority
insisted did not comply with the country's indigenisation laws,
and, more importantly, with the terms of the licence, the authority
cancelled the licence on 9 August 2007. The applicant appealed that
cancellation to the responsible Minister, in terms of section 96 of
the Postal and Telecommunications Act [Chapter
12:05],
on 10 August 2007, and approached this court by urgent application,
in HC4301/07, for interim relief. This court, per MUSAKWA J, issued a
consent order on 15 August 2007 to wit;
“It
is hereby ordered that:
1.
Pending the determination of the appeal by the second respondent, the
order cancelling the licence and directing the applicant to switch
off its telecommunications, issued by the first respondent, be and is
hereby suspended.
2.
There is no order as to costs.”
Just
as well the applicant had the presence of mind to seek the suspension
of the cancellation order, because it was not until 29 April 2010
that the Minister finalised the appeal - almost 3 years later. The
Minister's decision, communicated by the Secretary for Transport,
Communications and Infrastructural Development on that date, is
helpful:
“RE:
TELECEL
ZIMBABWE LICENCE
Your
minute AM/mn/342/10 dated 28 April 2010 refers. The Ministry holds
the view that cancelling Telecel Zimbabwe's licence is not tenable
vis-a-vis
the thousands of subscribers the mobile operator now has and the many
negative messages such action would convey to potential investors
both in the sector and across the whole economy.
Thus,
at a meeting between Honourable Minister NT Goche (MP) and Telecel's
chief, Mr Kia Uebech, on 1 April 2010, Government's requirement
that Telecel Zimbabwe reverts back to its original 60:40 position in
respect of its local:foreign shareholding was stated/indicated.
Telecel undertook to address this challenge. Clearly, it will be
difficult for the Government to support the renewal of the licence
come 2013 should Telecel fail to comply with Government's
pre-condition. In our view, the ball is now in Telecel Zimbabwe's
court.”
That
way, the licence was reinstated on the understanding that the
shareholding would be regularised to meet Government requirements.
Since
2010, the parties have been engaged in dialogue over the shareholding
which went on and on with no end in sight. A lot has happened,
including an agreement signed by the parties on 6 August 2013.
However, not happy with what the applicant had done, the first
respondent again cancelled the applicant's licence, on 28 April
2015, on the basis that the applicant had failed to comply with the
Postal
and Telecommunications Act [Chapter
12:05].
It then set about issuing a raft of provisions in its final
regulatory order which reads:
“11.
REGULATORY
ORDER
HAVING
REGARD to the provisions of the Act, Telecel licence conditions,
persistent compliance default, all relevant evidence, and the
submissions made by Telecel Zimbabwe Limited, POTRAZ hereby makes the
following order in the exercise of its power under the Act.
11.1
Telecel's licence to provide National Cellular Telecommunications
Service is hereby cancelled with effect from the date of this order.
11.2
Telecel immediately notifies its subscribers and relevant
stakeholders of the termination of its licence upon receipt of this
order.
11.3
Telecel ceases to operate its cellular telecommunications network and
ceases to offer any communication service upon receipt of this order.
The
effect of the cancellation is as follows:
(a)
Radio frequency spectrum allocated to Telecel for the provision of
cellular telecommunication services are hereby withdrawn with effect
from the date of receipt of this order (see Annex 01
for the detailed spectrum information).
(b)
Radio frequency spectrum allocated to Telecel for the establishment
of Microwave Fixed Links in 7, 8, 13, 18, 22 and 23 GHz bands are
hereby withdrawn with effect from the date of receipt of this order.
(c)
Radio frequency spectrum allocated to Telecel for the establishment
of a C-band VSAT Earth Station are hereby withdrawn with effect from
the date of receipt of this order.
(d)
The number resources used by Telecel Zimbabwe Limited to offer
telecommunication services are hereby withdrawn with effect from the
date of this order.
12.
SPECIAL
DISPENSATION TO TELECEL
NOTWITHSTANDING
the provisions of sub-paragraphs 11.2 and 11.3 above, however, and
being mindful of the disruptive effect of an immediate cessation of
operations upon the subscribers and other stakeholders of Telecel,
POTRAZ hereby grants a special dispensation to Telecel for it to
continue with its operations for a period of thirty (30) days from
the date of receipt of this order. The purpose of the dispensation
will be to afford Telecel an opportunity, among other things, to:
12.1
Facilitate the migration of subscribers from Telecel to other
licenced telecommunications operators.
12.2
Notify its employees and agents of the cancellation of its operating
licence.
12.3
Notify its stakeholders in the mobile financial services sector of
the cancellation of its licence.
12.4
Notify the general public of the cancellation of its licence.
12.5
Begin the process of decommissioning its telecommunications equipment
which process has to be completed within ninety (90) days calculated
from the date of receipt of this order.”
Hence,
on the stroke of the pen, and by Regulatory decree, scores of
employees had lost employment and a number of subscribers had lost a
service, never mind other stakeholders and never mind the labour laws
of this country dealing with notice of termination of employment.
The
applicant has now come to court on an urgent basis seeking the
following relief:
“TERMS
OF FINAL ORDER SOUGHT
That
you shall show cause to this Honourable Court why a final order
should not be made in the following terms:
1.
That pending determination of the finalisation of the appeal by the
applicant, pursuant to the provisions of s 96 of the Posts and
Telecommunications Act [Chapter 12:05], that Regulatory Order No.1 of
2015 and special licence and concomitant dispensations imposed by the
Postal and Telecommunications Regulatory Authority of Zimbabwe
(POTRAZ) be and are hereby suspended.
2.
That pending finality to the appeal process, as provided by the Posts
and Telecommunications Act [Chapter 12:05], applicant shall not
dispose of any movable assets or infrastructure without notice to the
first, second and third respondents.
3.
That there be no order as to costs.
INTERIM
RELIEF (GRANTED)
Pending
determination of this matter, the applicant is granted the following
relief:
(a)
That first to third respondents be and are hereby interdicted from in
any way of (sic)
interfering with the normal business activities of the applicant
pursuant to the provision of its telecommunication services and
related business activities to the public and its subscribers in
Zimbabwe.
(b)
The dispensation time periods mentioned in Regulatory Order No.1 of
2015, and the cancellation of applicant's licence, be and are
hereby suspended until such time as there has been a final
determination of (sic)
a final order sought in terms of this application.”
In
its founding affidavit, deposed to by Angeline Vere, its General
Manager, the applicant states that after all its attempts to reduce
its foreign shareholding to a level acceptable to the first
respondent were rejected by the latter, which retains the exclusive
right of approval in terms of clause 12 of the licence, the first
respondent resorted to the drastic action of cancelling the licence
on terms set out in the Regulatory Order aforesaid.
Clause
12 of the licence provides:
“12.1
Ownership
12.1.1
Foreign
Investment and Shareholding Structure
1.
The
holder of this licence must be incorporated in Zimbabwe. The licencee
shall ensure that the foreign ownership shall be limited to forty
nine percent (49%).
2.
Changes
in the shareholding structure, at any stage, must be approved by the
Authority before it is effected.
3.
In the event that the licencee's initial shareholding structure
does not conform to the provisions of clause 12.1.1.1 the licencee
shall, within five (5) years from date of signing of the licence,
ensures (sic)
that the foreign ownership is reduced to forty nine percent
(49%.).”…,.
Over
the years, the applicant has tried to comply by introducing a new
partner to assume ownership of the 11 per cent balance of the 60 per
cent shareholding held by the foreign partner, Telecel International
Limited (TIL), but the first respondent either rejected the proposed
partner or insisted it had to be approved by the Minister. At one
stage, the applicant was told the 11 per cent shareholding could only
be sold to the fourth respondent which holds the other 40 per cent
stake.
The
applicant introduced an Employees Share Ownership Scheme (ESOP), in
terms of which its employees would own the 11 per cent shares
currently in the hands of Telecel International Limited (TIL) in
order to move the shareholding to indigenous people. This was
rejected. It proposed listing on the Zimbabwe Stock Exchange as
another option - which was also rebuffed. Instead, the first
respondent cancelled the licence. The reason given for the
cancellation appears in paragraph 1 of the first respondent's
'judgment' of 28 April 2015 which reads:
“1.
INTRODUCTION
This
case concerns Telecel Zimbabwe Limited (hereinafter referred to as
'Telecel') non-compliance with licence conditions, provisions of
the Postal Telecommunications Act [Chapter 12:05] (hereinafter
referred to as 'the Act') as read with Indigenisation and
Economic Empowerment laws. The Postal Telecommunications Regulatory
Authority of Zimbabwe (hereinafter referred to as 'POTRAZ') has
to determine whether the licence issued to Telecel to provide
National Cellular Telecommunication Services should be cancelled or
not and issue an appropriate order.”
The
applicant stated that following the cancellation and the “appropriate
order” it has appealed to the second respondent, the responsible
Minister, but, meanwhile, the Regulatory Order remains extant as the
appeal does not have the effect suspending the order appealed
against. Whichever way, it is unlikely that the Minister will dispose
of the appeal before the expiration of the period of 30 days it has
been given to close shop; a period which is unreasonable in the
circumstances given that it employs more than 700 direct employees
(at the hearing counsel for the employees corrected that figure,
there are 820 direct employees) whose employment contracts would have
to be terminated. In addition, in terms of
the Postal and Telecommunications Act [Chapter
12:05],
they are entitled to 28 days during which to lodge an appeal.
The
applicant therefore craves the interim relief aforesaid.
While
the other respondents did not oppose the application; in fact,
counsel for the fourth respondent supported it, and counsel
for
the second and third respondents had no submissions to make except
that the Minister would await the appeal, the first respondent
surprisingly opposed the application vehemently as if everything
depended on the cancellation of the licence and the closure of the
applicant….,.
The
first respondent gave notice of an intent to cancel the licence and
invited the applicant to make representations as to why such
cancellation should not be effected. This was as it should have been
in terms of the procedure set out in section 43(2) of the Postal and
Telecommunications Act [Chapter
12:05].
The applicant made those representations, which did not find favour
with the first respondent and it duly cancelled the licence on 28
April 2015 - issuing an order which ignored, completely, the
applicant's right of appeal to the Minister….,.
What
the applicant seeks is a temporary, interim or interlocutory
interdict. HOLMES JA set out the requirements for the grant of such
an interdict in Ericksen
Motors (Welkon) Ltd v Proten Motors, Warrenton and Anor
1973 (3) SA 685 (A)…, (quoted with approval by SANDURA JA in
Charuma
Blasting and Earthmoving Services (Pvt) Ltd v Njainjai and Ors
2000 (1) ZLR 85 (S)…,.) as:
“The
granting of an interim interdict pending an action is an
extraordinary remedy within the discretion of the court. Where the
right it is sought to protect is not clear, the matter of an interim
interdict was lucidly laid down by INNES JA in Setlogelo
v Setlogelo 1914
AD 221 at p 227. In general, the requisites are:
(a)
A right which, 'though prima
facie
established, is open to some doubt'.
(b)
A well-grounded apprehension of irreparable injury.
(c)
The absence of ordinary remedy.
In
exercising its discretion, the court weighs, inter
alia,
the prejudice to the applicant if the interdict is withheld against
the prejudice to the respondent if it is granted. This is sometimes
called the balance of convenience. The foregoing considerations are
not individually decisive, but are interrelated; for example, the
stronger the applicant's prospects of success the less the need to
rely on prejudice to himself. Conversely, the more the element of
'some doubt' the greater, the need for the other factors to
favour him…,. Viewed in that light, the reference to a right which,
'though prima facie established is open to some doubt'; is apt,
flexible and practical, and needs no further elaboration.”
See
also Bozimo
Trade and Development Co (Pvt) Ltd v First Merchant Bank of Zimbabwe
Ltd & Ors
2000(1) ZLR 1 (H)…,.
In
respect of the establishment of a prima
facie
right,
counsel for the applicant
alluded
to section 96 of the Postal and Telecommunications Act [Chapter
12:05]
which gives the applicant a right to appeal the decision of the first
respondent to the Minister and to section 71 of the Constitution of
Zimbabwe relating to the right to protection of property.
On
the other hand, counsel for the first respondent submitted that the
applicant would not possibly have any right, prima
facie
or
otherwise, when it has been operating outside the law; that is,
without compliance with the indigenization laws of this country,
which counsel for the applicant
countered
by submitting that the Indigenization and Economic Empowerment Act
[Chapter
14:33]
only came into effect in April 2008 long after the licence had been
issued on 26 June 2002.
Counsel
for the fourth respondent brought a new dimension to the issue.
He
submitted that to the extent that the cancellation is premised on
indigenization laws, as stated in the first respondent's
'judgment', the cancellation is invalid because the first
respondent is not the enforcement authority of the Indigenization
and Economic Empowerment Act [Chapter
14:33];
the Minister of Youth, Empowerment & Indigenisation is in terms
of section 5 thereof. It is him who initiates the process of
cancellation for want of compliance with that Act.
It
is not necessary for me to determine all those issues because that is
the province of the second respondent when dealing with the appeal. I
am sitting only be decide whether a case had been made for an interim
interdict.
I
think it has been.
Section
96(1) of
the Postal and Telecommunications Act [Chapter
12:05]
provides:
“Subject
to this section, any person who is aggrieved by -
(a)
A decision of the Authority not to issue a licence or certificate; or
(b)
Any term or condition of a licence issued to him, or a refusal by the
Authority to specify a term or condition in a licence; or
(c)
A refusal by the Authority to review a licence or certificate; or
(d)
Any amendment of a licence or a refusal by the Authority to amend a
licence; or
(e)
The suspension or cancellation of a licence; or
(f)
The grant or refusal to grant any approval or authority in terms of
this Act; or
(g)
The outcome of any mediation by the Authority of a dispute between
licensees; or
(h)
Such decision of the Authority as may be prescribed;
may,
within twenty eight days after being notified of the decision or
action of the Authority concerned, appeal, in writing, to the
Minister, submitting with his appeal such fee as may be prescribed;
Provided
that such appeal shall not suspend the operation of any licence or
certificate issued by the Authority.”
After
cancelling the applicant's licence, the first respondent issued a
special licence effective from 28 April 2015 to 26 May 2015 to
facilitate only the winding up of the applicant's operations -
presumably including the termination of the employment contracts of
820 employees. Such termination would ordinarily require three (3)
months' notice where there are good grounds in terms of the labour
laws of this country. The applicant cannot lawfully employ those
employees after 26 May 2015. All
that against the backdrop of the applicant's right of appeal to the
Minister; which right subsists until the expiration of 28 days, on 28
May 2015, if one includes weekends and public holidays.
By
the time the applicant's right of appeal expires, the applicant
would have closed down in terms of the Regulatory Order. What that
means, therefore, is that the Regulatory Order effectively
obliterates the applicant's right of appeal reposed to it by
section 96 of
the Postal and Telecommunications Act [Chapter
12:05].
Clearly,
therefore, that Regulatory Order is not only unreasonable in the
extreme in its effect, it also infringes upon the right of appeal
given to the applicant by the Postal
and Telecommunications Act [Chapter
12:05].
That right has been taken away.
More
importantly, there is the possibility that the Minister may take a
while to determine the appeal. There is no time limit given by the
Postal
and Telecommunications Act [Chapter
12:05]
for him to determine an appeal. Section 96(3) of the Postal
and Telecommunications Act [Chapter
12:05]
only requires him to make an order on appeal “after due and
expeditious inquiry.”
A
precedent has already been set in that regard. When the applicant
appealed another cancellation by the first respondent, in August
2007, the Minister took almost 3 years to determine the appeal….,.
Where
an administrative authority makes a decision which renders nugatory
the right of the affected party to appeal, that decision cannot be
said to accord with the dictates of administrative justice…,. It
cannot be rational neither can it be fair, and, in fact, borders on
unlawfulness.
I
therefore entertain no doubt that the requirements of an interdict
have been met.
The
applicant does have a prima
facie
right to appeal which has been curtailed - if not negated. There has
been an infringement of that right, which, if allowed to perpetuate,
would adversely prejudice the applicant and its employees. It would
have to close before it has exhausted remedies available to it.
In
weighing the balance of convenience, as I am required to do, I can
conceive of no prejudice that may be sustained by the first
respondent except for a wounded ego which perhaps is the only reason
why it chose to oppose the application. It is a truism that the first
respondent has acted in an overzealous and precipitate manner without
regard to the rights of stakeholders in this matter. It has, in fact,
proceeded rough-shod over the rights of those that it is sworn to
superintend, and, in so doing, it has created a train smash of
gigantic proportions.
It
is for these reasons that I granted the provisional order, as
amended, the interim relief of which is in the following:
“INTERIM
RELIEF GRANTED
Pending
determination of this matter, the applicant is granted the following
relief:
(a)
That first to third respondents be and are hereby interdicted from in
any way interfering with the normal business activities of the
applicant pursuant to the provision of its telecommunication services
and related business activities to the public and its subscribers in
Zimbabwe.
(b)
The dispensation time periods mentioned in Regulatory Order No.1 of
2015 and the cancellation of applicant's licence be and are hereby
suspended until such time as there has been a final determination or
a final order sought in terms of this application.”
