Ecolife insurance back on track
BUSINESS| Oct. 25, 2011, 7:13 p.m.
By Alfonce Mbizwo, Harare, Zimbabwe
A venture to provide life insurance to subscribers of Zimbabwe’s Econet Wireless is back on after Namibia’s Trustco obtained a High Court order to execute an earlier court judgment nullifying the cancellation of the agreement.
In July this year, Econet lost the bid to terminate Trustco Mobile contract in a mobile-based life insurance project after the High Court of Zimbabwe issued an interim order against the mobile network operator.
The latest ruling, however, is subject to Supreme Court appeal.
By close of business Tuesday, Econet chairman Tawanda Nyambirai had not indicated if he plans to appeal after losing every court battle on the issue.
Trustco Mobile, a wholly owned subsidiary of Trustco Group Holdings Limited, had applied for an interdict against Econet Wireless seeking to enforce a contract entered between the two companies in a mobile-based life insurance project, Ecolife.
Last week, the JSE-listed Trustco notified its shareholders of the High Court order: “The following order has been granted by the High Court of Zimbabwe on 12 October 2011: "First Applicant (Trustco Mobile (Pty) Ltd) and Second Applicant (Trustco Group International) are hereby allowed to execute the judgment as handed down in HC 6065/11 on 25 July 2011.”
The July High Court order 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.”
It also directed that Econet refrain from undertaking and implementing a competing, infringing service to that provided by Trustco Mobile in terms of the agreement.
Under the arrangement, Econet subscribers received life cover and bonus points against purchase of airtime while Trustco provided the software and maintenance services. Econet would then purchase life cover from First Mutual life, a Zimbabwean insurance firm.
Econet terminated the contract at the end of May, accusing Trustco Mobile of breaching the contract between the two companies.
Trustco said it had earlier suspended its service after Econet failed to pay USD4.8 million in outstanding royalty fees for the use of its system. It also suggested the fallout may have been due to its refusal to an offer by Econet to acquire a stake in the company following the success of the Ecolife product.
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