Mauritius Supreme Court delivers ground-breaking judgment in unfair competition case
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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