Vodafone wins part appeal against $14m Mobile Innovations ruling

Vodafone has won a substantial portion of its appeal against the Supreme Court's award of $14 million plus costs and damages to reseller Mobile Innovations.

The Court of Appeal of NSW has upheld much of the telecommunications retailer's appeal against the earlier Supreme Court of NSW decision by Justice Einstein in favour of Mobile Innovations last year.

Justice Einstein had ruled that the mobile phone reseller was owed $14 million plus costs and damages to March 2003, for contract breaches relating to customer acquisition targets.

Ilkka Tales, CEO at Mobile Innovations, said the ruling was 'disappointing' but the company would survive and move on. The mobile phone reseller will still receive about half of the original award, he said.

'There's an additional customer management agreement worth some $2.467 million, and in our favour for idle overhead costs for our infrastructure which at maximum would be about $3.4 million – but we need to go through a process to determine those costs, plus statutory interest,' he said.

The court ruled that Vodafone had failed to provide to Mobile Innovations some 30,000 additional customers, Tales said.

'This has had a major impact on us for the last two years,' he said.

Mobile Innovations was also ordered to pay 80 percent of Vodafone's legal costs in its appeal, while Vodafone was ordered to pay 25 percent of Mobile Innovations' costs for its original suit.

'That might work out slightly in our favour. It's 80 percent of three days versus 25 percent of four weeks,' Tales said.

Final figures would not be known until the legal teams had sat down and worked it all out, he added.

Vodafone was found guilty in April 2003 of breaching its ten-year contract with Mobile Innovations, allegedly by reducing its partner's customer acquisition targets to zero.

The Court of Appeal in NSW had granted Vodafone a stay over the judgement relating to $13,286,100 of the claim until after this appeal. The court also previously ruled that Vodafone must pay $933,000 relating to a V.Mobile claim and a website dispute.

Mobile Innovations has also appealed against a ruling that the mobile phone reseller didn't have the rights to exclusive direct marketing as part of its deal with Vodafone.

There is one higher court to which Mobile Innovations may appeal further. However, the reseller has been given three weeks to go through all the ramifications and make its final decision, Tales said.

'It's going to take a while for the lawyers to digest,' Tales said.