South Africa's Telkom Loses Telcordia Court Case

Posted 23 November 2006 @ 02:43 pm EET     Print     Reprint     E-Mail     Comments

JOHANNESBURG (Reuters) - A South African court has ruled against fixed-line phone company Telkom in a $130 million dispute over a cancelled contract with U.S. software and IT services company Telcordia, Telkom said on Wednesday.

The Supreme Court of Appeal had upheld an appeal by New Jersey-based Telcordia Technologies over the cancellation of a service agreement in 1999, and Telkom would now study the options open to it, the company said in a statement.

Telkom legal services executive Anton Klopper told Reuters Telcordia was seeking $130 million in damages but that a fair settlement price would be about $50 million. He said it was too early to say whether Telkom would try to challenge the verdict.

Telkom said in its interim results statement earlier this month it had not made a provision for any damages should it lose the legal battle over the cancellation of a service agreement in 1999.

Telkom shares fell 3.7 percent to 130 rand on Wednesday, lagging a slightly firmer Johannesburg Top-40 index of blue-chip stocks.