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MTN TO APPEAL HIGH COURT RULING ON TRANSITIONAL LICENSE FEES

By Khasacha Mwene

Telecom giant MTN Uganda has expressed intent to appeal a decision of the High Court in which it dismissed with costs, a case in which MTN was challenging the legality of the Uganda Communications Commission (UCC) directive to pay $14.14m (more than Shs50.7b) as transition license fee for the three-year transitional period. In a press statement issued on Tuesday May 4, 2021, the telco acknowledged having received a ruling from the Civil Division of the High Court of Uganda, (Miscellaneous Cause Number 240 of 2020), in relation to a transitional license fees of US$ 14,140,030, assessed by UCC for the period October 2018 to June 2020.

“While MTN Uganda respects the decision of the High Court; it appreciates that the Laws of Uganda provide an opportunity to have this matter reviewed by the Court of Appeal. MTN is confident that the Court of Appeal will at an appropriate time, consider all matters raised by MTN comprehensively and pronounce itself in accordance with the law and evidence on record,” the telco said in the statement. It added: “MTN Uganda is a responsible corporate citizen committed to meeting all its lawful obligations and remains committed to playing its part in the development of the telecommunication industry and Uganda as a whole.”

High Court Judge Musa Ssekaana ruled that there was no impropriety in UCC’s decision to impose transition fees based on a pro-rated assessment and that the same was fairly arrived at and guided by the amount paid for of $100m in the currently renewed license.

“… it has been shown that the respondent (UCC) arrived at the amount payable as transition fees in the fairest manner and no reasonable person would think otherwise. Otherwise, any amount beyond what was agreed and paid for in the (National Operator) NTO license would have been challenged as being excessive and using the figure originally paid in Second National Operator (SNO) license in 1998 would have been irrational since it would be extremely low,” he ruled.

Justice Ssekaana ruled that UCC has specialised knowledge of the telecoms sector and therefore applied it to arrive at the decision whereby it would not be rational for court to substitute its decision with another. The court decision resulted from a case in which MTN had challenged a decision by UCC to levy transitional fees.

The telecom had cited the levy as illegal and not derived from the law, arguing that at the time of the demand for transition license fees, no legal or regulatory framework for determination of the fees for had been established. Therefore, court ruled that indeed UCC had powers under Section 6(1)(a) of the Uganda Communications Act, noting that the determination and charging of license fees is one of the operational administrative powers exercisable by UCC under Sections 5 (1)(a)(b) and (z) and 6 of the Uganda Communications Act 2013.

“It is accordingly untenable for the Applicant to argue that there is no legal framework and no law under which the fees were levied. There is no requirement in the law that provides that the actual amount payable shall be determined by way of a statutory instrument,” Justice Sekana ruled. He also reasoned that at all material times during the transitional period when MTN’s operations were being temporarily extended, the company was fully aware that an appropriate license fee for the extensions would have to be paid at a later date because this was an express provision in the authorisations, which it accepted.

“It is disingenuous to now turn around and argue that the fee is illegal because it is retrospectively being applied. There is no law that prevents payment or ascertainment of payment in arrears for a license one has used for private gain. If the Applicant did not want to pay fees after consuming a service it should have declined the extensions,” Justice Sekana ruled. According to court, MTN had sought to quash a decision in which UCC had directed MTN to pay $14.14m as license fees for the transition period.

The telecom had also sought an order restraining UCC from implementing its decision and in any way interfering with or interrupting with its operations by reason of its decision as well as prohibiting UCC from unilaterally determining and levying the license fees for the transition period which are not prescribed by law. Through its lawyers, MTN had also asked court to declare that any license fee for the transition period should be determined with reference to the company’s Second National Operator (SNO) license. (For comments on this story, call, text or whatsapp us on 0705579994, 0779411734, 0200900416 or email us at mulengera2040@gmail.com).

 

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